UK cuts interest rates further in three months... 5.0% → 4.75%

The UK has further cut its benchmark interest rate in three months.

The Bank of England held a monetary policy committee meeting on the 7th local time and decided to cut its key interest rate by a quarter of a percentage point to 4.75% from 5.0% per annum.

It's the first further cut in more than four years since August, when it cut interest rates to 5%.

This is the second time the Bank of England has cut its benchmark interest rate since March 2020.

Earlier, the UK had raised interest rates for the 14th time in a row until August last year, and it had frozen for the seventh time in a row until June this year, maintaining a 16-year high of 5.25%.

Consumer inflation in September, announced last month, fell to 1.7% per annum, the lowest since April 2021, which is believed to have bolstered the interest rate cut theory.

"We have to keep inflation close to our target, so we can't cut rates too quickly or too much," Bank of England Governor Andrew Bailey said in a statement. "Rates are likely to continue to fall gradually if the economy progresses as expected."

This is interpreted as being cautious about the prospect of a future rate cut, as it was during the rate freeze in September.

As a result, attention is focusing on whether additional interest rate cuts will be made at this year's last monetary policy committee, which will be held next month.

Interest rate futures markets reflect a 20% chance of further cuts in December, according to the Financial Times.