The decision to cut rates was close with a majority of five to four members of monetary policy committee to reduce bank rate by 0.25%, to 4.25%. Two members wanted to aim for a larger cut of 0.5%, but this was rejected.

The Bank planned to maintain ‘bank rate in restrictive territory so as to continue to squeeze out persistent inflationary pressures’.

Underlying UK GDP growth has cratered since the middle of 2024, and the employment market has continued to loosen, meaning that the Bank is being cautious about cutting interest rates too fast. But recession fears are lurking with businesses hating the current uncertainty exacerbated by the US tariff policy, with 25% tariffs on cars and steel, and threats of 10% tariffs across the board when reciprocal tariffs kick in again in July.