Bank of England Expected to Cut Rates Again Amid Economic Slowdown
Date: August 2, 2025
The Bank of England is widely expected to announce another interest rate cut next week, lowering the base rate from 4.25% to 4.00% as part of a continuing effort to stabilize the UK economy.
This would mark the fifth rate cut in 2025, following a year of steady reductions amid slowing inflation and rising unemployment. Analysts point to the latest economic indicators with inflation falling to 3.6% and unemployment climbing to 4.7% as strong justification for continued monetary easing.
“We’re seeing a cooling economy,” said senior economist Elaine Markham of the Financial Outlook Bureau. “While inflation is not fully tamed, the risk of a recession is forcing the Bank to act pre-emptively.”
The move is expected to provide some relief for homeowners and businesses, particularly those with variable-rate mortgages or new loan agreements. However, concerns remain about the long-term impact of looser monetary policy.
“There’s a balance to strike here,” said Marcus Reid, an investment strategist. “Cutting too fast may reignite inflation pressures, especially as consumer demand begins to rebound.”
Retail and housing sectors are likely to benefit from cheaper borrowing, though some experts caution that rate cuts alone won’t resolve underlying structural issues including low productivity and weak business investment.
The Bank of England’s next Monetary Policy Committee meeting is scheduled for August 7. Markets have already priced in the likelihood of a rate cut, but analysts are watching for signals about whether further reductions will follow into Q4.
By Fidelis News
📍 Filed under: UK News
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