The Bank of England has cut interest rates to the lowest level in over two years and has hinted more could follow in the coming months.
The Bank's monetary policy committee (MPC) lowered borrowing costs by 0.25 percentage points to 4.25% from 4.5&.
The Bank’s rate-setting committee was divided - five members voted to cut rates to 4.25%, two voted in favour of a larger 0.5% reduction and two voted for no change.
The reduction in rates on Thursday marks the fourth cut within the past year and the Bank considered a larger cut to 4% due to concerns the global trade war could hit UK economic growth.
Chancellor Rachel Reeves said: "This interest rate cut is welcome news, and the fourth since we came into government making it cheaper for businesses to borrow, reducing the cost of a new mortgage, making homeownership more accessible, car finance more affordable and easing the pressure on those paying off personal loans.
"But there is more to do, and I know families are still facing cost of living pressures.
"In a changing world, we’re bringing stability to the public finances and going further and faster to grow the economy, putting more money in the pockets of working people through our plan for change."
Andrew Bailey, governor of the Bank of England, said: “Inflationary pressures have continued to ease, so we’ve been able to cut rates again today. The past few weeks have shown how unpredictable the global economy can be.
“That’s why we need to stick to a gradual and careful approach to further rate cuts” he said, adding that interest rates were “not on autopilot, they cannot be”.
FTSE 100
The UK's flagship share index, the FTSE 100, was down 19 points at 8,568 shortly after opening this morning.
Brent crude oil futures were up 0.56% at $63.19 a barrel.
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