The central bank said future cuts would be gradual amid higher inflation forecasts after the new government introduced spending and tax increases in its budget.

The Bank of England has cut its main interest rate by a quarter of a percentage point after inflation across the U.K. fell below its target rate of 2%.

Bank of England Governor Andrew Bailey stuck to his script outlining gradual interest rate cuts on Thursday, but Donald Trump's White House return and threats to impose tariffs could force a hasty rewrite,

Interest rates have been cut for the second time this year, by a quarter of a percentage poi, but mortgage rates are still set to rise in a blow to homeowners. The Bank of England reduced the base rate from 5 per cent to 4.75 per cent on Thursday, following a 0.25 percentage-point cut in August, which was the first drop in four years.

The markets and economists expect the Bank of England will cut its bank rate by 25 basis point to 4.75% on Thursday. It will be the second such reduction in borrowing costs since the U.K. central bank began easing policy in August.

The Bank of England is likely to cut interest rates on Thursday for only the second time since 2020 but the big question for investors is whether the BoE sends a signal about its subsequent moves after the government's inflation-raising budget.

The Bank of England cuts interest rates to 4.75% in line with expectations, continuing its easing cycle started in August.

The Bank of England cut interest rates but pointed to the uncertainty facing the global economy from fresh trade barriers and Middle East conflict

Bank of England policymaker pledges to ‘move big’ when ready to cut rates - Catherine Mann, an economist and member of the Bank’s Monetary Policy Committee, has not yet opted to reduce rates.