Bank of England on interest rates

The Bank of England (BoE) is set to announce a potentially historic interest rate cut today, as markets anticipate a 65% chance of a 25-basis-point reduction from the current 5.25% rate, which has remained unchanged for 16 years. The decision comes in light of inflation returning to the BoE's target of 2%, yet concerns linger over persistent services inflation, which has remained high at 5.7%. Policymakers appear divided, with some advocating for a cut while others express caution due to wage growth and inflationary pressures. The BoE's communications have been limited recently due to the U.K. general election, adding to the uncertainty surrounding today's decision. If enacted, this rate cut would benefit homeowners by lowering mortgage payments but could affect savers negatively. The announcement will be accompanied by a Monetary Policy Report detailing economic forecasts and insights into inflation trends.