Outside Source
Key Takeaways
- The Bank of England decided to cut interest rates by 25 basis points during its monetary policy meeting today.
- The reduction is the second rate cut this year following a previous cut in August.
Share this article
The Bank of England (BoE) lowered its key interest rates to 4.75% from 5% on November 7, marking its second rate cut this year as UK inflation dropped to 1.7% in September, falling below the central bank’s 2% target.
The rate reduction comes after the BoE decided to hold its interest rate steady in September, following an August cut that brought the rate to 5%. The September pause was intended to assess the impact of previous rate reductions while ensuring inflation remained under control.
British inflation declined sharply from 2.2% to a three-year low of 1.7% in September, dropping below the BoE’s 2% target and supporting expectations for a more accommodative monetary policy stance.
Money markets had priced in a high likelihood of the November rate cut, though analysts cautioned that recent UK government fiscal policy decisions, including tax hikes and changes to debt rules, could impact the pace of future rate reductions.
The central bank has signaled it will maintain a cautious approach to monetary easing. Some members of the Monetary Policy Committee expressed concerns about lingering inflationary pressures when rates were cut in August. This suggests future reductions would be gradual to prevent inflation from resurging.
The BoE’s decision comes ahead of the Federal Open Market Committee meeting, where the US Fed is expected to announce a 25 basis point rate cut.
The Fed reduced the federal funds rate by 50 basis points in September, bringing it down to a target range of 4.75% to 5%. The decision was largely influenced by signs of easing inflation and a weakening labor market.
The price of Bitcoin jumped around 6% to $63,000 following the Fed’s September decision. It was trading close to $75,000 at the time of reporting, barely budged in the past 24 hours, per CoinGecko.
Share this article
This article first appeared at Crypto Briefing
