Bank of England Cuts Rates to 4.0% But Vote Was Close

The Bank loof England has today ‘gambled’ on the economy and inflation by cutting interest rates by 0.25% to 4.0% pa.  This is a gamble given inflation has been increasing and is forecast by the Bank to increase to 4.0% pa in September.

The Governor of the Bank of England (and ex FCA boss), Andrew Bailey even sighted Rachel Reeves’ economy policy and budget as a reason the UK economy is slowing down and needs stimulating despite inflation now forceast 0.3% higher than previoulsy forecast for September.

Comment

Even the Bank of England Monetary Policy Committee members wer torn on the decsion, with only a 5:4 majority to cut rates.

The last time rates were cut was in May and we have long suggested the next rate cut should have been in September given inflation rises.  Again, we expect the FTSE 100 to remain steady as a rate cut was expected but domestically focussed companies listed in FTSE 250, FTSE 350 and FTSE All Share should climb.