Financial Forecasts December 2025

BoE Rate Cuts: Navigating the Uncertainty of Future Reductions

As we expected , the Bank of England cut interest rates following a narrow vote among Monetary Policy Committee members (5-4) , with Governor Andrew Bailey shifting his stance to support the reduction. The Bank indicated that the pace of future rate cuts could slow, making the decision on how much further to reduce rates "a closer call." While there has not been a substantial downturn in the labo u r market and inflation expectations have not decreased significantly, inflation is expected to decline more rapidly toward the 2% target in the near term. As the pace of interest rate cuts is ...