“We need to make sure inflation stays close to target, so we can’t cut interest rates too quickly or by too much,” Bailey said in a statement on Thursday in London. “But if the economy evolves as we expect, it’s likely that interest rates will continue to fall gradually from here.”
The Bank of England cut borrowing costs for the second time this year, but stopped short of signaling faster easing, warning that last week’s budget could drive up inflation by as much as half a percentage point.
The Monetary Policy Committee led by Governor Andrew Bailey voted 8-1 to lower the benchmark interest rate by a quarter point to 4.75%, with Catherine Mann, an external official, the sole dissenter. The outcome was widely anticipated by economists.
