Bank of England Lowers Interest Rate to 4.25 Percent Amid Board Division

The British central bank, Bank of England, lowers the interest rate to 4.25 percent, from previously 4.50 percent. The decision was made by a narrow majority in a divided board of directors – where several want to lower further and others not at all.

» Published: May 08 2025

Bank of England Lowers Interest Rate to 4.25 Percent Amid Board Division
Photo: Kin Cheung/AP/TT

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The majority of the board, five members, voted for the decrease. Two members wanted to decrease even further, while two wanted to leave the interest rate unchanged.

"The inflation pressure has continued to decrease, so we have got the chance to decrease the interest rates again today", said the central bank chief Andrew Bailey according to a press release.

According to the announcement, monetary policy easing will continue, gradually and cautiously then.

The announcement of a decrease in the interest rate by 0.25 percentage points was expected, according to a compilation of forecasts made by Bloomberg.

The decision was made before the USA's president Donald Trump flagged that he has made up for a new major trade agreement with the United Kingdom – which he is expected to present on Thursday.

The Bank of England is simultaneously decreasing its inflation forecast for 2026-2027. The forecast now points to a peak for inflation later this year and that the inflation target of 2 percent has been reached within two years.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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