The Bank of England cut interest rates by a quarter point to 4% Thursday, after a historic split among the Monetary Policy Committee required a second vote, indicative of the uncertainties plaguing a flagging UK economy.
While the decision to lower rates was widely expected, the second round of voting was the first in the rate-setting committee’s history, coming amid intense global trade uncertainty caused by unpredictable US tariffs.
The decision to cut rates for the fifth time since last August comes as the UK economy continues to struggle: Inflation remains high, unemployment rose last quarter, and GDP shrank in April and May.
The Bank of England also marginally raised its growth forecast for the year to 1.25%, up from 1%, AFP reported, while also predicting higher inflation.