Summary
The Bank of England made a decision to lower interest rates, often referred to as a "Santa rate cut," to help boost a slow economy. The cut was made possible by declining inflation rates, and the bank expects more cuts in the future, though they might be more difficult to decide. The drop in interest rates is intended to encourage spending by making saving less attractive.
Key Facts
- The Bank of England cut interest rates, which they call the "Santa rate cut."
- This decision came after inflation showed signs of decreasing.
- Governor Andrew Bailey believes inflation will reach the target of 2% by April.
- There was a close vote on the rate cut, with Bailey as the deciding voter.
- Some members of the Monetary Policy Committee think the normal interest rate could be as low as 3%.
- The UK economy is currently not growing, described as "lacklustre."
- Businesses have reported no immediate rebound in economic activity.
- High savings rates, especially among older consumers, are seen as limiting economic growth.
