Interest Rates Cut as Bank of England's Growth Forecast Revised
Bank of England Governor Andrew Bailey today announced that UK interest rates would be cut from 4.75% to 4.5%, in a move to stimulate economic growth.
The Bank of England has halved its 2025 growth forecast and cut interest rates to 4.5% amid economic stagnation and global uncertainty.
It now expects the UK economy to grow by just 0.75% this year, down from its previous 1.5% estimate, with inflation set to rise before declining. Bailey warned of weaker short-term growth before a recovery later in the year.
The rate cut, agreed by all nine Monetary Policy Committee members, has raised concerns about stagflation. It will be welcome news for sectors like construction, which depends on long-term finance for growth.
Less welcome will be the revised growth forecast, at which Chancellor Rachel Reeves expressed disappointment.