Bank of England Cuts Rates, Halves 2025 Growth Forecast

The Bank of England (BoE) has cut its benchmark interest rate from 4.75% to 4.5%, the lowest in over 18 months, in an effort to stimulate a sluggish economy, which has seen its growth forecast halved to 0.75% for 2025. This decision, supported by a majority of the Monetary Policy Committee, follows disappointing GDP data and ongoing concerns about inflation and economic stagnation. Critics, including the Conservatives, have accused the Labour government of damaging economic confidence, while Chancellor Rachel Reeves faces pressure to implement policies to drive growth. The BoE's Governor Andrew Bailey emphasized the need for careful monitoring of the economy amidst fears of potential recession and rising global trade tariffs. Following the announcement, the FTSE 100 reached a record high, but the Pound fell against the dollar as markets adjusted expectations for future rate cuts. The situation reflects growing anxiety about the UK's economic outlook and the effectiveness of government measures to spur recovery.