The Bank of England has further lowered the interest rate in the United Kingdom. The Bank of England aims to support the economy with lower borrowing costs.
The interest rate was reduced by a quarter of a percentage point to 3.75 percent.
This is the fourth interest rate cut this year. The decision was in line with economists’ expectations. Policymakers at the Bank of England were not unanimous. Five of the nine directors voted in favour of a rate cut, while four would have preferred a pause.
The interest rate cut follows an unexpected contraction in the British economy in October. Unemployment also rose. Furthermore, it was revealed on Wednesday that British inflation fell sharply in November to 3.2 percent.
While inflation remains above the central bank’s 2 percent target, the downward economic trend gives the central bank room to lower borrowing costs and thus stimulate the economy, consumption and credit supply.
