Bank of England cuts rate to 4.5% as inflation eases

The Bank of England (BOE) decided on Thursday to reduce its bank rate by 0.25 percentage points to 4.5 per cent at its meeting on 5 February 2025, citing progress in curbing inflation, according to the bank’s statement.

The Monetary Policy Committee (MPC) noted that inflationary pressures have eased due to past monetary tightening and the fading impact of external shocks. Consumer price inflation (CPI) stood at 2.5 per cent in Q4 2024 but is projected to rise temporarily to 3.7 per cent in Q3 2025 before returning to the 2 per cent target.

Despite weaker-than-expected GDP growth and softening business and consumer confidence, the labour market remains broadly balanced. The MPC signalled a cautious approach to further rate adjustments, balancing risks from both inflation persistence and economic uncertainties.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser