Bank of England cuts rates. Experts react
18 DEC, 2025
By Joanna Piwko from RankiaPro Europe
The Bank of England has lowered interest rates from 4% to 3.75%, marking its sixth reduction since last summer. Her's how financial professionals reacted.
Luke Bartholomew, Deputy Chief Economist at Aberdeen Investments
Given the run of more moderate inflation data, the weakening labour market, and the disappointing GDP growth in recent months, today’s cut was widely expected. However, the fact that the vote was so close suggests that many policymakers are still not convinced that the economy has fully emerged from the inflation crisis. That said, with the economy expected to remain weak over the coming year and the recent budget including various measures aimed at reducing overall inflation, we believe there will be further rate cuts, and that the Bank Rate will eventually return to 3% by the end of next year.
Gordon Shannon, Co-Head of Investment Grade at TwentyFour AM
As expected, the Bank of England has decided to cut rates despite the close voting outcome. Yesterday’s decline in inflation supports the Bank of England continuing its easing policy through to 2026, as the cooling labour market is conducive to further disinflation. However, the dissent among members was likely driven less by doubts about slowing growth and more by concerns over navigating the final stage of disinflation, the persistence of services prices, and the desire for wage growth to align with the target rather than merely trend towards it.
