Bank of England cuts interest rates to 4.0%, as expected

(Sharecast News) - The Bank of England cut interest rates on Thursday by 25 basis points to 4.0%, as widely expected. The Monetary Policy Committee voted 5-4 to cut the rate. Andrew Bailey, Sarah Breeden, Swati Dhingra and Dave Ramsden voted in favour of the 25 basis rate cut, while Megan Greene, Clare Lombardelli, Catherine L Mann and Huw Pill opted for the rate to remain unchanged.

Alan Taylor was in favour of a cut to 3.75%, meanwhile.

The Bank also revised up its forecast for inflation, saying it now expects consumer price inflation to peak at 4.0% in September - having previously forecast a peak of 3.7% - before falling back thereafter towards the 2% target.

"There has been substantial disinflation over the past two and a half years, following previous external shocks, supported by the restrictive stance of monetary policy," the BoE said.

"That progress has allowed for reductions in Bank Rate over the past year. The Committee remains focused on squeezing out any existing or emerging persistent inflationary pressures, to return inflation sustainably to its 2% target in the medium term."