UK Monetary Policy Report - August 2025

The Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. The MPC adopts a medium-term and forward-looking approach to determine the monetary stance required to achieve the inflation target sustainably. At its meeting ending on 6 August 2025, the MPC voted by a majority of 5–4 to reduce Bank Rate by 0.25 percentage points, to 4%, rather than maintaining it at 4.25%. There has been substantial disinflation over the past two and a half years, following previous external shocks, supported by the restrictive stance of monetary policy. That progress has allowed for reductions in Bank Rate over the past year. The Committee remains focused on squeezing out any existing or emerging persistent inflationary pressures, to return inflation sustainably to its 2% target in the medium term. The path of disinflation in underlying dom #BOE *BANK OF ENGLAND CUTS KEY INTEREST RATE TO 4% AFTER 5-4 VOTE - BBG *BOE: 5 VOTED FOR QUARTER-POINT CUT, 4 TO KEEP RATE UNCHANGED *BOE's Taylor Voted For Cut To 3.75%, But Backed Move To 4% In Second Vote *BOE SEES INFLATION PEAKING AT 4% IN SEPTEMBER, UP FROM 3.7% Bank of England cuts interest rates by a quarter point to 4% as balancing act continues The Bank of England cut interest rates from 4.25% to 4% on Thursday as the central bank resumes a “gradual and careful” approach to lowering interest rates. The BOE was widely expected to trim rates by 25 basis points at its latest monetary policy meeting, but traders and economists were keen to see the breakdown of support for the decision among the bank’s policymakers. As it turned out on Thursday, the nine-member MPC voted by a majority of 5–4 to reduce the key interest rate, the “Bank Rate,” by 25 basis points rather than keeping it on hold. Policy makers have had to weigh up sticky inflation — the consumer pr

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