Bank of England Lowers Rates to 3.75 Percent
This marks the sixth consecutive reduction since August 2024, when the central bank initiated its easing cycle from a 16-year peak of 5.25 percent. The BoE has steadily unwound its aggressive tightening measures as economic conditions deteriorate.
The decision arrives as Britain grapples with anemic growth and a weakening jobs market. While inflation has retreated from recent highs, price pressures remain elevated above the central bank's two percent objective.
The Office for National Statistics (ONS) reported November's annual Consumer Prices Index (CPI) dropped to 3.2 percent from October's 3.6 percent reading. The deceleration exceeded market forecasts, though Britain's inflation rate still ranks as the steepest among Group of Seven nations.
Meanwhile, official data paint a picture of persistent economic fragility. Real gross domestic product (GDP) shrank 0.1 percent during the three-month period ending October 2025, with weakness spreading across major sectors.
Employment conditions have deteriorated further as well. The jobless rate climbed to 5.1 percent for the quarter through October 2025—the highest level witnessed in nearly half a decade excluding the pandemic era—while payroll figures continued their downward trajectory.
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