Bank of England reduced interest rates up to 4% to the quarter point
The Bank of England, the Royal Exchange and the Statue of the Duke of Wellington in London, on February 19, 2025 in London, United Kingdom.
Mike Camp | In pictures | Getty
The Bank of England on Thursday reduced interest rates from 4.25% to 4% because the Central Bank has resumed a “slowly and carefully” approach to reducing interest rates.
The BOE was expected to trim the rates by 25 points at its latest financial policy meeting, but was eager to support the decision between the traders and economists of the bank’s policy.
It happened on Thursday that the nine-member MPC voted by the majority of the majority of the people. Instead of reducing the main interest rate, “bank rate”, voted to reduce 25 points.
Policy makers had to weigh smooth inflation – Consumer Price Index (CPI) increased by up to 6.6% more than expected in June From 3.4% in May – With Cooling Jobs Market And low quality growth. UK’s gross domestic product Movies in the month-month of May in May.??
In a statement ThursdayThe bank has said that the MPC “focuses on the current or emerging inflation pressure, to bring inflation back to 2% of the medium -term target.”
Despite the different opinions of the policymakers at the BOE, economists expect the path below for the interest rate next year, but the Central Bank reiterated its cautious approach and “a gradual and careful approach to withdrawing the restraint on economic policy is correct.”
The time and speed of future deductions in the prevention of policy will depend on the limit of reducing the basic sterile pressure, the BOE said.
Before the latest policy meeting, Barkey’s main UK economist Jack said that in February next year, the bank’s rate, its main interest rate is 3.5.5% gradually to continue to reduce the 25-basis-point reduction.
Capital Economics’s UK economist Ley Shali Webb has estimated that the central bank can further postpone its economic policy.
“Despite the unexpected rise in CPI inflation in June, we think the weakness in the labor market is the time to decline in the rate of 2% of inflation, and it will only reduce the bank of England from 4.25% to 3.25% on Wednesday by 3.50% on Wednesday.
No ‘smoking gun’
Economists pointed to the labor market as an important factor in the decision of the policymakers, but in the employment statistics, there was no decisive evidence of a “smoking gun” or a concrete recession.
“The question is whether the meeting is closer to the job market or not,” James Smith and Chris Turner from ING said in a letter, “Slack is undoubtedly ready.”
On Wednesday, on June 18, 2025, the waiter creates a waiter restaurant terrace before opening in London, UK. The UK employment was the highest in five years and the wage hike was reduced.
Bloomberg | Bloomberg | Getty
“The number of employees in the last eight months has decreased. The unemployment rate has increased by a few tenth parts of the year … (and) the other major economies of the UK job market have become even more cool,” he said.
But the flags by the analysts are a “slow -moving story”, in which the most weaknesses of employment in the hospitality area, whose national minimum wage and recent government tax rise in pay tax tax have an unpleasant impact.
“In other words, there is no smoking gun that will still motivate the bank to rethink the basic reconsideration from the bank’s point of view.
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