The Bank of England has cut interest rates to its lowest levels since 2023, in a close decision vote with 5 to 4 in favour.
With the vote going through, the rates now sit at 3.75%, down from 4%.
Concerns about weak economic growth and rising unemployment have outweighed inflation worries, with price pressures easing but still above the Bank’s 2% target.
Policymakers expect inflation to approach 2% by mid-next year, partly due to tax and spending measures in last month’s Budget.
The Bank's next meeting to examine interest rates is on February 5th, while concerns about inflation and rising unemployment persist.
Inflation in Britain is expected to reach the Bank's 2% target by the middle of next year, and interest rates are likely to continue trending downward as well.
"We still think rates are on a gradual path downward but with every cut we make, how much further we go becomes a closer call," said the Bank's governor, Andrew Bailey.
