BoE Cuts Rates After Tight Vote, Signals Caution on Future Reductions

• The Bank of England cut its benchmark interest rate to 3.75% from 4.0% after a narrow 5-4 vote by the Monetary Policy Committee.
• Governor Andrew Bailey changed his stance, voting for the cut, but warned that future reductions would be "a closer call."
• The decision follows a sharp drop in inflation to 3.2% and a BoE forecast of economic stagnation in late 2025.
• Some policymakers, including Clare Lombardelli and Huw Pill, voted against the cut, citing concerns about persistent high inflation, which remains the highest among G7 economies.
• The BoE noted a weakening jobs market and revised its Q4 2025 growth forecast to zero, while acknowledging the budget's mixed impact on future inflation.

Why It Matters: BoE cuts rates but signals a slower, more cautious approach to future monetary easing due to inflation risks.