The Bank of England cut the rate for the first time since 2020

The Bank of England has lowered its base interest rate by 25 basis points to 5% per annum following today's meeting. This decision coincided with the consensus forecast of analysts, although before the meeting, market participants estimated the probability of such a move at about 60%.

This is the first rate cut since 2020, when the rate was at its highest level in 16 years.

The Central Bank's management noted that inflation in May and June fell to the target level of 2%, but it is expected to rise to 2.75% in the second half of the year due to the low base of energy prices. The regulator also noted a decrease in wage growth to 5.6% in March-May and a slowdown in inflation in the service sector to 5.7% in June. UK GDP growth is also important, despite the continued pressure of restrictive monetary policy on the real sector of the economy.

The Committee continues to monitor the accumulation of inflationary pressure according to various indicators, according to a press release from the Bank of England. The regulator's management also warned that inflationary pressures may be more stable in the medium term than expected.