The Bank of England has reduced interest rates to 4%, reflecting ongoing economic weakness. This marks the fifth rate cut since last August, aimed at providing relief for borrowers amid stagnant growth indicators. Early signs from April and May show the economy has not expanded, heightening fears of a potential recession. While borrowers may benefit from lower costs, savers face diminishing returns, with deposit rates predicted to decline. The bank's actions signal a concern about the overall health of the economy, portraying a defensive stance rather than promoting growth.
The Bank of England has cut interest rates to 4%—its fifth reduction since last August—delivering welcome relief for borrowers, but also sending a stark warning about the health of the UK economy.
The fact that rates are being cut at a time when inflation has already cooled shows just how worried the Bank is about growth.
This is a defensive move from a central bank concerned about stagnation.
Today’s cut is reported to save the average borrower with a £250,000 variable rate mortgage around £40 a month. But savers will feel the squeeze.
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