Interest rates cut for the first time in four years

The Bank of England has cut rates for the first time since 2020, to 5% - with the Monetary Policy Committee (MPC) voting to reduce the policy rate from a 16-year high. This decision came after inflation fell back to the Bank’s 2% target in May and held steady in June. But the vote to cut was narrow: the MPC vote was split 5-4 in favour of a rate cut, with the minority believing that monetary policy needs to remain tight to extinguish ingrained domestic inflationary pressures. The MPC was quick to say this was not the start of a pre-determined series of rate cuts, instead that the Committee would “go from meeting to meeting”.

The vote to cut interest rates was narrow

The Bank of England’s MPC voted to cut interest rates in August, reducing the Bank Rate to 5% (from 5.25%). This marks a first step to unwinding a tightening cycle that beg