URGENT: BoE cuts interest rate by 0.25 points

The Monetary Policy Committee (MPC) of Bank of England decided on Thursday to cut its interest rate by 0.25 percentage points to 4.75 per cent in its November 6 meeting. One MPC member voted to keep it at 5 per cent.

The decision reflects ongoing progress in easing inflation, as external pressures have diminished. However, domestic inflationary pressures are still receding gradually.

UK inflation dropped to 1.7 per cent in September down from 2.2 per cent in August but is projected to rise to about 2.5 per cent by year’s end as lower energy prices fade from the yearly measure.

“Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further. The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.”

Attribution: The Bank of England