Bank of England Cuts Rate to 4% Amid Division

The Bank of England has cut its base interest rate by 0.25 percentage points to 4%, marking the fifth reduction in the past year and bringing rates to their lowest level since March 2023. The decision followed an unprecedented two-round vote among a split Monetary Policy Committee (5-4), highlighting ongoing debates over how to address persistent inflation and a struggling economy. Inflation is now forecast to soon reach double the 2% target, while unemployment continues to rise and economic growth remains weak. The reduction is expected to benefit mortgage holders but reduce returns for savers. Chancellor Rachel Reeves welcomed the move, though critics blame government tax rises and policy uncertainty for the UK’s lackluster performance. Further rate cuts are expected to proceed gradually and depend on economic data.