The Bank of England followed the examples of the European Central Bank and the Bank of Canada by enacting a new rate cut.
The central bank’s Monetary Policy Committee (MPC) voted 7-2 to reduce Bank Rate by 0.25 percentage points, to 4.5%. The two dissenting members voted to reduce the Bank Rate by 0.5 percentage points, to 4.25%.
“There has been substantial progress on disinflation over the past two years, as previous external shocks have receded, and as the restrictive stance of monetary policy has curbed second-round effects and stabilized longer-term inflation expectations,” said the central bank in a press statement. “That progress has allowed the MPC to withdraw gradually some degree of policy restraint, while maintaining Bank Rate in restrictive territory so as to continue to squeeze out persistent inflationary pressures.”
“In support of returning inflation sustainably to the 2% target, the Committee judges that there has been sufficient progress on disinflation in domestic prices and wages to reduce Bank Rate to 4.5% at this meeting,” the central bank added.
