by David Milliken and Andy Bruce
Reuters.com
LONDON, Feb 6 (Reuters) – The Bank of England cut interest rates by a quarter-point and some policymakers wanted a bigger move to offset a slowdown, but the BoE said it would be careful about further moves in the face of an expected inflation spike and global economic uncertainty.
The BoE halved its 2025 growth outlook – a blow for finance minister Rachel Reeves who is pushing to speed up the economy – and said inflation would be almost double its 2% target this year. Governor Andrew Bailey said he thought that would prove to be a “bump in the road” before inflation falls back.
Thursday’s rate cut to 4.5% from 4.75% was in line with expectations in a Reuters poll of economists.
But investors were surprised that Catherine Mann – previously the Monetary Policy Committee member most opposed to rate cuts – joined Swati Dhingra to seek a bigger reduction to 4.25%.