Bank of England Slashes Interest Rates Amid Economic Stagnation

The Bank of England has cut its main interest rate for the third time in six months due to stagnant economic growth. The rate was reduced to 4.50% by the Monetary Policy Committee. The bank is closely monitoring the economy to maintain low inflation rates, despite rising inflation expectations.

The Bank of England has once again slashed its main interest rate, marking the third reduction in six months, as the British economy grapples with sluggish growth. The nine-member Monetary Policy Committee voted to lower the rate by a quarter percentage point to 4.50%, the lowest level since mid-2023.

Seven members favored the cut, while two advocated for a larger reduction to 4.25%. The base rate's change affects both borrowing costs for mortgages and loans, and the returns on savings. This latest rate cut highlights growing anxiety about the British economy, which has seen minimal expansion over the past half-year.

Bank of England Governor Andrew Bailey commented on the decision, noting that it signifies positive news for some but iterated the necessity of vigilant monitoring of the economic landscape. As the bank aims to maintain its inflation target of 2%, the recent decline in inflation to 2.5% is seen as a temporary easing influenced by service sector price pressures.

(With inputs from agencies.)