Her basic interest rate reduced today (8.5.2025), the Bank of Englandinfluenced by the global economic uncertainty caused by US duties.
Specifically, the Bank of England (BOE) reduced its key interest from 4.5%to 4.25%in the last meeting. The decrease was widely expected, especially after slowing price rise, with inflation colding at 2.6% in the twelve months to March (from 2.8% last month).
Five of the nine BOE policymakers voted in favor of the reduction, with two members wanting a greater reduction by 50 basis points and two holding interest rates on waiting.
Boe said today (8.5.2025) that the uncertainty about global commercial policies has intensified after the imposition of US duties and subsequent retaliation.
“The prospects for global development have been weakened as a result of this uncertainty and new tariff announcements, although the negative impacts on the growth and inflation of the United Kingdom are likely to be smaller,” he added.
The Bank of England Governor Andrew Bailey stresses that he expects to continue the recession of wage pressure, helping to reinstate inflation to the bank’s target for 2%.