Welcome to the Money blog, your place for personal finance and consumer news and tips. Today's focus will largely be on interest rates as the Bank of England makes its six-weekly announcement.
Bank of England governor Andrew Bailey is speaking on the bank's latest decision to cut the interest rate.At 12.30pm today, the Monetary Policy Committee will hold a news conference on their decision to cut the interest rate.Bank expects gradual rate declineShortly after cutting the rate, governor Andrew Bailey said policymakers"need to make sure inflation stays low, and be careful not to cut interest rates too quickly or by too much".
"There is a meaningful group of buyers that put off moving home in the wake of the mini-budget that can now push on with confidence. The Bank of England has been particularly cautious, so by opting to cut the base rate it has sent a real statement that inflation is largely beaten. The disastrous mini-budget in September 2022 under Liz Truss's shortlived administration prompted the pound to plummet and inflation to soar, triggering mortgage mayhem.
"In government, we took difficult decisions that cut inflation from 11.1% to the Bank's target 2% paving the way for lower rates. This is a large part of the explanation for why unemployment is higher, house prices are lower and for why many households are still struggling - even though the annual rate of inflation is now back to the Bank's target rate of 2%.Indeed, in some senses the pain is already reducing somewhat: mortgage providers, anticipating lower Bank of England rates, have already begun to reduce fixed rate mortgage rates.
The Bank's decision today wasn't exactly a surprise: financial markets had put the probability of a rate cut today at over 60%. Far from being a unanimous verdict, four of the nine members of the Monetary Policy Committee actually voted to leave interest rates at 5.25%. This wasn't, in other words, a slam dunk.
The Bank's decision came after the consumer price index rate of inflation dropped to 2% this summer - the MPC's target. "Inflationary pressures have eased enough that we've been able to cut interest rates today," he said. "While this is still 10% below the level prevailing before the pandemic struck, it is still a respectable pace given the higher interest rate environment," he said.GPs across England have voted overwhelmingly in favour of taking industrial action as part of a dispute over funding and contract changes, the British Medical Association has said.
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