The Bank of England has cut interest rates from 4.25% to 4% following a sharp rise in inflation driven by soaring food prices and the uncertainty over the impact of Donald Trump’s tariffs.
Governor Andrew Bailey said, “We’ve cut interest rates today, but it was a finely balanced decision.
“Interest rates are still on a downward path, but any future rate cuts will need to be made gradually and carefully.”
James Evans, CEO at agents Douglas & Gordon said: “Today’s quarter cut rate is critical to reigniting confidence, especially in the housing market. It is important that rates continue to fall in the near to medium term. This rate cut is a much-needed shot in the arm for the market. Transactions will rise, and I’m confident house prices will follow.”
James Carter, Portfolio Manager at W1M said: “With inflation surprising to the upside and expectations drifting higher, the MPC is unlikely to pre-commit to further easing after today’s cut.
“Assuming further labour market softening, we would still expect cuts in November and February. However, today’s move likely marks the start of a more data-dependent phase, with policymakers watching global events closely and balancing the risk of persistent inflation against a cooling jobs market.
“Clearer data on the impact of tariffs or another bout of global instability could easily tip the Bank’s next decision one way or another.”
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