Bank of England Reduces Base Rate

The Bank of England has announced it's second reduction of the year, bringing the base rate below 5% for the first time since June 2023.

A near unanimous vote of 8-1 confirmed what had been an expected decrease, but slightly more hawkish comments from the BoE Governor indicate future cuts may be slower in materialising.

Increases to employer national insurance are expected to have a small impact on inflation, which will no doubt be at the forefront of the MPCs mind when assessing future cuts.

A number of economists had been forecasting another decrease of 0.25% in December, but inflationary pressures would explain Andrew Bailey describing future reductions as 'gradual'. This may well mean that an additional cut in December is less likely, instead looking to the beginning of 2025.