Bank of England cuts rates but sees higher inflation after Reeves’ budget

The Bank of England cut interest rates on Thursday for only the second time since 2020 and said future reductions were likely to be gradual, seeing higher inflation and growth after the new government’s first budget.

The Monetary Policy Committee voted 8-1 to cut interest rates to 4.75 per cent from 5 per cent, a stronger majority than expectations in a Reuters poll for a 7-2 vote in favour of a cut. Catherine Mann dissented, preferring to keep rates on hold.

“We need to make sure inflation stays close to target...