The Bank of England reduced interest rates to 4% in a bid to stimulate the slowing economy. But it warned that food prices—already climbing—could lift inflation to 4%, undermining relief efforts.
The narrow vote among committee members underscores the difficulty of managing inflation while supporting growth. This marks the fifth cut in a year but could be the last for some time.
City investors responded cautiously, while Chancellor Reeves hailed the decision as a sign of stability. Still, critics argue that government tax hikes are compounding the pressure on households.
The Bank’s inflation warning points to external weather shocks and internal policy choices. Food inflation is now expected to outpace previous forecasts, putting more strain on consumer budgets.
60