BOE cuts rate as disinflation progresses

By Aya El Sayed On May 8, 2025

Bank of England (BOE) — URGENT: BOE holds interest rate at 5%

The Bank of England’s (BOE) Monetary Policy Committee (MPC) decided on Thursday to cut the bank rate by 0.25 percentage points to 4.25 per cent at its May meeting, citing continued progress in curbing inflation.

Inflation fell to 2.6 per cent in March, down from 2.8 per cent in February, nearing the 2 per cent target. Despite lingering wage pressures and a projected temporary rise in inflation to 3.5 per cent in the third quarter due to earlier energy price hikes, the MPC noted that price and wage growth are easing overall.

UK GDP growth has slowed since mid-2024, while the labour market has continued to soften.

The committee highlighted increased global trade uncertainty following new US tariffs and retaliatory measures, which have weighed on global growth expectations and added volatility to financial markets.

The MPC emphasised that monetary policy remains restrictive and not on a pre-set path, stressing the need for a gradual approach to easing. It pledged to maintain a tight stance until inflation risks are further contained.

Attribution: Amwal Al Ghad English

Subediting: M. S. Salama

Bank of England Bank of England (BOE)Consumer Price Index (CPI)core inflation energy price Geopolitical factors inflation target Monetary policy committee (MPC)