Bank of England cuts key rate by 25 basis points, as expected

By Tuba Ongun

The Bank of England (BoE) on Thursday lowered its bank rate by 25 basis point to 4.75%, citing continued progress in disinflation.

The move, in line with market forecasts, was the second rate cut in four years following the beginning of its cutting cycle in August.

"There has been continued progress in disinflation, particularly as previous external shocks have abated, although remaining domestic inflationary pressures are resolving more slowly," said a BoE statement after its Wednesday meeting.

Eight of the Monetary Policy Committee's nine members backed the move, while one voted to keep the rate at 5%, the BoE said in a statement.

Consumer inflation fell to an over three-year low of 1.7% in September but is projected to rise to approximately 2.5% by year's-end as lower energy prices phase out of the yearly comparison, it said.

The bank forecast inflation to reach 2.2% in 2026.