> The Bank of England has cut rates to 5%, marking the first drop since March 2020, which is likely to lead to lower mortgage repayment deals. The Bank had held rates at a 16-year high of 5.25% since August 2023, as it attempted to tackle rising prices across the UK. The last time rates were dropped was in the early days of the coronavirus pandemic, they were slashed to a record low of 0.1% in an attempt to boost the economy.
> It was a narrow vote in favour. A group of three committee members led by the Governor of the Bank of England, Andrew Bailey, switched their vote from hold to cut, giving a 5-4 majority in favour, compared with a 7-2 vote in June.
One of the members who voted to hold, Jonathan Haskel, will also be replaced by the next meeting. The key split on the rate-setting committee is between those who think that with inflation at the Bank’s 2% target, it is appropriate to reduce slightly the squeeze on the economy, and others who still fear there will be enduring inflationary scars from the recent energy and food prices shocks.
!ping UK
AdSoft6392 on
Surprising to see them do this when chunky public sector pay offers have recently been announced. I thought they would wait to see how that potentially feeds through
ChairLampPrinter on
Cue the conspiracy theories from people who think the BoE waited for Labour to win to cut rates.
3 Comments
> The Bank of England has cut rates to 5%, marking the first drop since March 2020, which is likely to lead to lower mortgage repayment deals. The Bank had held rates at a 16-year high of 5.25% since August 2023, as it attempted to tackle rising prices across the UK. The last time rates were dropped was in the early days of the coronavirus pandemic, they were slashed to a record low of 0.1% in an attempt to boost the economy.
> It was a narrow vote in favour. A group of three committee members led by the Governor of the Bank of England, Andrew Bailey, switched their vote from hold to cut, giving a 5-4 majority in favour, compared with a 7-2 vote in June.
One of the members who voted to hold, Jonathan Haskel, will also be replaced by the next meeting. The key split on the rate-setting committee is between those who think that with inflation at the Bank’s 2% target, it is appropriate to reduce slightly the squeeze on the economy, and others who still fear there will be enduring inflationary scars from the recent energy and food prices shocks.
!ping UK
Surprising to see them do this when chunky public sector pay offers have recently been announced. I thought they would wait to see how that potentially feeds through
Cue the conspiracy theories from people who think the BoE waited for Labour to win to cut rates.