The Bank of England voted narrowly to cut interest rates on Thursday, in its last monetary policy move of 2025.
The central bank’s nine-member monetary policy committee (MPC) on Thursday voted 5-4 to trim the benchmark interest rate by 25 basis points to 3.75%, marking the fourth cut of the year.
Economists had widely expected the rate trim, which comes at a time of lackluster economic data, softening labor market and a recent decline in inflation that outpaced expectations.
Nonetheless, the vote was a narrow one, with BOE Governor Andrew Bailey siding with more dovish members of the committee rather than the four policymakers who maintain that the inflation rate, at 3.2% in November, is still far from the central bank’s 2% target.
The BOE’s lower “base” rate will be welcomed by hard-pressed consumers as it makes borrowing cheaper, but many lose out with lower returns on their savings.
