The Bank of England’s monetary policy committee has voted to lower its main lending rate by a quarter of one percentage points, down from 5% to 4.75%, saying that inflationary pressure justified the cut.
It is the second cut this year following a reduction in August.
Tom Hopkins, senior portfolio manager at wealth manager BRI Wealth Management said: “I suspect this will be the final cut to rates in 2024 despite the MPC meeting again in mid-December
“This pause will allow the Bank of England time to assess the economic impact of increased government borrowing announced in the Budget, with the first meeting 2025 being held in early February.
“Markets have already tempered expectations for rate cuts in 2025, now forecasting two or three rate cuts in 2025, down from earlier projections of four or five.
“Whilst inflation in the UK is now back below target, the Bank will continue to monitor signs of inflation persistence through labour market tightness, private sector wage growth, and services inflation.
Matthias Scheiber, Global head of multi-asset portfolio management, Allspring Global Investments, said: “As expected, the Bank of England cut interest rates for a second time this year.
“Despite a slowing in growth and inflation the BoE is likely to remain cautious and data dependent as the latest budget surprised on the upside which could result in higher inflation.
“As a consequence, we think a December cut has become less likely. With the BoE more careful we expect more interest rate uncertainty shorter-term though the longer-term outlook for UK Gilts remains constructive as both growth and inflation continue to cool.”
