LONDON (dpa-AFX) - The Bank of England reduced its benchmark interest rate for the fifth time in a year as domestic and geopolitical risks weigh on economic activity.
The Monetary Policy Committee voted 5-4 to cut the bank rate by 25 basis points to 4.00 percent. The fifth cut since last August took the rate to the lowest since early 2023.
'A gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate,' the bank said in a statement.
Although inflation is projected to rise slightly further to peak at 4.0 percent in September, it is set to fall back thereafter towards the 2 percent target, the bank said.
The committee judged that the upside risks around medium-term inflationary pressures have moved slightly higher since May.
Further, policymakers noted that underlying GDP growth remained subdued, consistent with a continued, gradual loosening in the labor market.
Downside domestic and geopolitical risks around economic activity remain, while trade policy uncertainty has diminished somewhat, the bank said.
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