Bank of England Cuts Rates Amid Inflation Concerns

The Bank of England cut interest rates, citing a temporary jump in inflation and halved its growth outlook. Officials discussed future rate cuts amid global economic uncertainties and a weakening UK economy. Concerns over business confidence, consumer spending, and global trade risks were also addressed.

The Bank of England took a significant step on Thursday by slashing interest rates, as officials acknowledged the temporary nature of the inflation jump while revising down the growth forecast for the year.

Governor Andrew Bailey, addressing the media, emphasized the challenges posed by a slowing economy and global risks. He noted that business and consumer confidence have weakened, affecting demand. The labor market, too, is showing signs of cooling. Bailey underscored the necessity of evaluating inflationary pressures to determine the future path of rate cuts.

Deputy Governor Dave Ramsden highlighted the orderly performance of the UK's gilt markets despite inflationary pressures and fiscal perceptions. The gold market dynamics were also touched upon, with differences noted between the U.S. and London markets.

(With inputs from agencies.)