Bank of England Cuts Interest Rates to 4.5%

Published 06 Feb 2025

The Bank of England has cut interest rates for the third time in just under a year, bringing the rate down to 4.5%. The move, supported by the majority of the Monetary Policy Committee, is aimed at boosting economic growth amid easing inflation, which currently sits at 2.5%. However, concerns remain that rising energy costs and other pressures could push inflation higher later this year.

This is the lowest base rate since June 2023.

The Bank of England has also adjusted its growth forecast, now expecting the UK economy to grow by 0.75% in 2025, down from an earlier prediction of 1.5%.

The rate cut could lead to lower borrowing costs for some homeowners and businesses, but the impact will vary depending on individual financial arrangements. As lenders respond to the change, borrowers and savers alike will be watching to see how it affects their finances.