Bank of England Cuts Interest Rate to 3.75% Amid Easing Inflation, Economic Woes

• The Bank of England cut its key interest rate by 0.25 percentage points to 3.75%, the first reduction in four months and the lowest since February 2023.
• The decision was prompted by signs of easing inflation, which slowed to 3.2% in November, below the bank's 3.4% forecast.
• Policymakers voted 5-4 for the cut, reflecting a divided Monetary Policy Committee, with some members still focused on high inflation.
• The move aims to bolster Britain's stagnant economy and weakening jobs market, where unemployment rose to 5.1%.
• Despite the cut, UK inflation remains higher than in Europe (2.1%) and the US (3.0%), and still above the Bank of England’s 2% target.

Why It Matters: Bank of England cuts rates to boost economy as inflation eases, but concerns about price rises persist.