News
  • Login
  • Home
  • News
  • Sport
  • Worklife
  • Travel
  • Reel
  • Future
  • More
Thursday, July 3, 2025
No Result
View All Result

NEWS

3 °c
London
8 ° Wed
9 ° Thu
11 ° Fri
13 ° Sat
  • Home
  • Video
  • World
    • All
    • Africa
    • Asia
    • Australia
    • Europe
    • Latin America
    • Middle East
    • US & Canada

    Ryanair cancels flights for 30,000 passengers due to French strike

    Nigeria’s Atiku Abubakar and Peter Obi join forces against Bola Tinubu

    Six dead, dozens missing after ferry sinks off Bali

    mass evacuations as blaze rages near Ierapetra, Crete

    Peru’s president doubles her salary despite record low approval rating

    Gaza hospital director killed in Israeli strike, relative says

    Fact-checking three key claims about Trump’s mega-bill

    Kanye West blocked from entering Australia over Hitler song

    Tibetan spiritual leader confirms he will have successor after his death

  • UK
    • All
    • England
    • N. Ireland
    • Politics
    • Scotland
    • Wales

    Clearly I was upset, says Rachel Reeves after Commons tears

    Driver dies after medical episode on M1 near Wakefield

    Cooler weather conditions set in across UK as heatwave ends

    Brendan Rodgers sees Celtic ‘doing more’ in summer transfer window

    Llanharan horse sex abuser Corey Coleman sentenced in court

    Newtownabbey cocaine dealer jailed for eight years

    Bruce Springsteen or George Clooney for US president?

    Hottest day of the year recorded in England

    Conor McGregor begins appeal against civil rape case finding

  • Business
    • All
    • Companies
    • Connected World
    • Economy
    • Entrepreneurship
    • Global Trade
    • Technology of Business

    Citroen owners left stranded over airbag safety risk

    Bank of England to redesign banknotes

    Heathrow considering legal action against National Grid over fire

    Deliveroo, Uber Eats and Just Eat to tighten checks to stop illegal workers

    M&S ‘fully back online in four weeks’, says boss

    UK-US tariff deal begins but still no news on steel

    Pledge to protect UK firms from cheap imports

    Lotus Cars has ‘no plans’ to close any factory

    UK’s data agency has ‘deep seated’ issues, review finds

  • Tech
  • Entertainment & Arts

    Dancers say Lizzo ‘needs to be held accountable’ over harassment claims

    Freddie Mercury: Contents of former home being sold at auction

    Harry Potter and the Cursed Child marks seven years in West End

    Sinéad O’Connor: In her own words

    Tom Jones: Neighbour surprised to find singer in flat below

    BBC presenter: What is the evidence?

    Watch: The latest on BBC presenter story… in under a minute

    Watch: George Alagiah’s extraordinary career

    BBC News presenter pays tribute to ‘much loved’ colleague George Alagiah

    Excited filmgoers: 'Barbie is everything'

  • Science
  • Health
  • In Pictures
  • Reality Check
  • Have your say
  • More
    • Newsbeat
    • Long Reads

NEWS

No Result
View All Result
Home Business

Bank of England expected to cut interest rates

February 6, 2025
in Business
6 min read
250 2
0
491
SHARES
1.4k
VIEWS
Share on FacebookShare on Twitter


Faarea Masud

BBC Business reporter

Reuters People walk past the Bank of England on an overcast day in Bank, London, on 3 FebruaryReuters

Interest rates are expected to be cut by the Bank of England later, in a move closely watched by households and economists.

Analysts predict the benchmark rate will be cut from 4.75% to 4.5%, given the recent weakness in the UK economy which has seen slow growth.

The Bank uses interest rates as its main tool for controlling inflation, which is currently above the Bank’s target. However, inflation unexpectedly dipped at the end of last year, raising expectations of a rate cut.

Inflation is forecast to rise again though, partly due to changes in the Budget as well as uncertainty around US President Donald Trump’s threatened use of tariffs.

If he does introduce import taxes on countries, it could lead to inflationary pressure globally, causing a knock-on effect on price rises in the UK.

Why do interest rates change?

The Bank moves rates up and down to try to control inflation, which measures the pace of overall price rises.

By raising rates, borrowing is made more expensive, so people have less money to spend. People may also be encouraged to save more.

In turn, this reduces demand for goods and slows the rate at which prices are rising.

But it is a balancing act – increasing borrowing costs risks harming the economy as it discourages businesses from investing and creating more jobs.

Once price rises are more under control, then the Bank will consider lowering interest rates.

Its base interest rate heavily influences the rates High Street banks and other lenders charge customers for loans, credit cards and other finance deals.

This is most obviously seen in the cost of mortgages.

About 629,000 households have “tracker” deals and would see an immediate impact from a rate cut. Typically, their monthly repayment would fall by about £29 as a result of the expected 0.25 percentage point cut later.

A similar number of householders have variable rate deals, and lenders will be under pressure to cut their rates if the Bank reduces the base rate.

Fixed-rate deals do not change immediately, but the expectation of further rate cuts could lead to new, or renewing, borrowers getting a better deal.

Savers would be hit by a base rate fall, as the return they receive from banks is likely to be cut.

‘Gradual approach’

In December, when rates were held at 4.75%, the Bank’s governor, Andrew Bailey, said it would take a “gradual approach to future interest rate cuts”.

But he added: “We can’t commit to when or by how much we will cut rates in the coming year.”

In the minutes from that meeting, the Bank said there was uncertainty “around how the measures that had been announced in the autumn Budget were affecting growth”.

Following November’s meeting, Mr Bailey would not be drawn on the impact of Trump tariffs on the UK economy, saying “let’s wait and see”.

In the US, the central bank – the Federal Reserve – has indicated it will cut rates at a slower pace this year.

When the Bank announces its interest rates decision at 12:00 it will also share a report on where it sees inflation going in the coming months and could hint at its strategy in response.

Cutting the UK interest rate would strike a balance between “supporting an economy that appears to have ground to a complete halt and preventing inflation from taking off again”, economist Paul Dales from Capital Economics told the BBC.

“Trump’s tariffs are unlikely to influence UK interest rates much,” he added, but wage growth being faster than the Bank’s forecast could influence its decision.

The UK economy grew by less than expected in November, after not growing at all in the previous two months. A further slowdown is expected as businesses brace for rising costs from April because of budgetary changes such as rising National Insurance contributions and higher minimum wages.

Thin, red banner promoting the Politics Essential newsletter with text saying, “Get the latest political analysis and big moments, delivered straight to your inbox every weekday”. There is also an image of the Houses of Parliament.



Source link

Tags: BankcutEnglandexpectedinterestrates

Related Posts

Citroen owners left stranded over airbag safety risk

July 3, 2025
0

Theo Leggett and James KellyBBC NewsBBCLisa Shackleton says her DS3 will not be fixed until the end of JulyAn...

Bank of England to redesign banknotes

July 2, 2025
0

Kevin PeacheyCost of living correspondentBBCVictoria Cleland, the Bank's chief cashier, wants people to have their sayBanknotes issued by the...

Heathrow considering legal action against National Grid over fire

July 2, 2025
0

Ben King & Faarea MasudTransport correspondent & Business reporter, BBC NewsPA MediaHeathrow Airport is considering legal action against National...

  • Ballyjamesduff: Man dies after hit-and-run in County Cavan

    510 shares
    Share 204 Tweet 128
  • Somalia: Rare access to its US-funded 'lightning commando brigade

    508 shares
    Share 203 Tweet 127
  • Uganda arrest over deadly New Year Freedom City mall crush

    507 shares
    Share 203 Tweet 127
  • George Weah: Hopes for Liberian football revival with legend as President

    506 shares
    Share 202 Tweet 127
  • Google faces new multi-billion advertising lawsuit

    506 shares
    Share 202 Tweet 127
  • Trending
  • Comments
  • Latest

Ballyjamesduff: Man dies after hit-and-run in County Cavan

August 19, 2022

Somalia: Rare access to its US-funded 'lightning commando brigade

November 23, 2022

Uganda arrest over deadly New Year Freedom City mall crush

January 3, 2023

Stranger Things actor Jamie Campbell Bower praised for addiction post

0

NHS to close Tavistock child gender identity clinic

0

Cold sores traced back to kissing in Bronze Age by Cambridge research

0

Ryanair cancels flights for 30,000 passengers due to French strike

July 3, 2025

Nigeria’s Atiku Abubakar and Peter Obi join forces against Bola Tinubu

July 3, 2025

Six dead, dozens missing after ferry sinks off Bali

July 3, 2025

Categories

World

Ryanair cancels flights for 30,000 passengers due to French strike

July 3, 2025
0

Tens of thousands of passengers have been hit by a French air traffic control strike that has cancelled flights...

Read more

Nigeria’s Atiku Abubakar and Peter Obi join forces against Bola Tinubu

July 3, 2025
News

Copyright © 2020 JBC News Powered by JOOJ.us

Explore the JBC

  • Home
  • News
  • Sport
  • Worklife
  • Travel
  • Reel
  • Future
  • More

Follow Us

  • Home Main
  • Video
  • World
  • Top News
  • Business
  • Sport
  • Tech
  • UK
  • In Pictures
  • Health
  • Reality Check
  • Science
  • Entertainment & Arts
  • Login

Copyright © 2020 JBC News Powered by JOOJ.us

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
News
More Sites

    MORE

  • Home
  • News
  • Sport
  • Worklife
  • Travel
  • Reel
  • Future
  • More
  • News

    JBC News