Bank of England Cuts Rate to 4% Amid Uncertainty

The Bank of England has cut its key interest rate by 0.25% to 4%, marking its fifth reduction in a year and lowering the rate to its lowest level since March 2023. The Monetary Policy Committee's closely contested decision responds to weak economic growth, a cooling jobs market, and persistent inflation, which remains above target at 3.6%. The rate cut is expected to provide relief to mortgage holders but further reduce returns for savers. Ongoing global trade tensions, particularly due to new U.S. tariffs, continue to cloud the economic outlook and have prompted preemptive action by central banks. Markets anticipate further gradual rate reductions, but the pace will depend on future inflation and economic data, as the BoE remains wary of stagflation and recession risks. Investors are watching for further signals from the Bank of England regarding future monetary policy amid these challenges.