Bank of England interest rate cut

Commenting on the interest rate cut from the Bank of England, Chris Arcari, Head of Capital Markets, Hymans Robertson said:

“The Bank of England’s decision to cut interest rates today underscores growing confidence that domestic price pressures are easing and recent monetary restraint is taking effect. Wage growth and services-sector inflation, while still elevated, are moderating, reducing the risk of persistent domestic price pressures. At the same time, recent business surveys point to weakening growth momentum, softer demand and continued headcount reductions, with output price inflation at a five-year low. Against this backdrop, policymakers are seeking to balance the upside risk of inflation against mounting downside risks to economic activity and the labour market.

“Today’s rate cut reflects a cautious approach, easing policy to support demand while ensuring disinflation remains on track. Monetary policy is judged to be moderately restrictive and moving closer to neutral, so gradual, data-dependent easing appears appropriate. Looking ahead, uncertainty persists on both sides. Premature loosening could stall progress on inflation, while maintaining too-tight conditions risks deepening economic fragility. The Bank’s stance signals confidence in the disinflation trend, but also vigilance in navigating a complex and volatile outlook.”

Please see Hymans Robertson's Inflation Tracker 2025, here.

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