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The Bank of England has in half its growth expectations in 2025 and reduced interest rates by a quarter of a point to 4.5 percent, as it contradicts the UK's stagnant economy and an increasingly unconfirmed international environment.
In a blow to the UK Chancellor Rachel Reeves, Bi He said that he is now expected to grow 0.75 percent this year, or half of its expectations in November 1.5 percent, and inflation before decline.
The predictions, which will make fears of the recession, came when all the nine members of the Monetary Policy Committee voted to reduce the measurement Rates From the previous 4.75 percent.
The majority of seven step preferred a quarter of a point, while two supported a reduction in half of the Jumbo points, including Catherine Man, for the past of the leading falcon.
“We are now expecting that GDP growth will be significantly weaker in the short term before picking up in the middle of the year,” said Boy Bank ruler,
Taking the possibility of fTSE 100 to a record during the day high and supported the bond market, but pushed the pound.
Neil Pirel, the chief investment official of Prime Minister Miton Investors, said that the intention of low prices was “giving the economy” it was “very required”.
He added that the voices for a half -point decreased clearly showed concern about the “economic growth state” in the United Kingdom.
The Bank of England estimated that GDP decreased by 0.1 percent in the last quarter of 2024, although it expects to pick up growth to 1.5 percent for both 2026 and 2027.
Al -Makazat markets expect other price cuts this year, by 60 percent of a third. Before the decision, this possibility reached about 35 percent.
But the central bank said that the matter would require a “accurate” approach to more price discounts, indicating that the market expectations of a quarterly issue of discounts were exaggerated.
She said that Reeves's decision to increase national insurance contributions to employers will reach both jobs and prices more than expected, with the unemployment rate to 4.8 percent during the next year, which is the highest 0.5 points than its previous expectations.
“We have certain growth expectations, but besides stubborn inflation,” said Nick Hayes, the head of the fixed income allocation in the investment managers in Aksa. “The good news of the bond market is that the most difficult members have become the most exciting.”
Gilts increased for two years, with revenues, which reflect interest rate expectations and turn back to prices, a decrease of 0.04 degrees Celsius to 4.11 percent in trading early in the afternoon.
The pound decreased by 1 percent a day against the dollar at $ 1.238.
FTSE 100, many of whose members recorded revenues in dollars, rose 1.6 percent. House builders and construction shares also rose.
Reeves welcomed the rate reduction, saying that it would help reduce the cost of living pressures for families and make it easier for companies to grow.
But she added, “I am still satisfied with the growth rate.”
The opposition Conservative Party said Reeves's “mismanagement” of the economy would reduce the scope of future discounts.
The Bank of England expects inflation to rise to 3.7 percent in the third quarter of this year, in the first place due to the high energy prices, before slipping to about 2.5 per cent during the year 2026 and the goal of 2 percent in 2027.
Billy said that the Bank of England expects “to be able to reduce the rate of banks as the inflation continues.” But he admitted that there is now “more uncertainty” about the extent of inflation.
The bank also referred to “an increase in economic uncertainty in the world and receiving in the fluctuations of the financial market,” according to the minutes of this week's meeting. He added that she was “closely monitoring” the customs tariff plans for the new Donald Trump administration.
The US President has hinted that the UK may be tasks planning to impose on trade partners such as the European Union, Canada and Mexico.
Billy said that if Trump's tariff contributed to the “fragmentation” of the global economy, it would be negative for growth, but the effects of inflation were more difficult to separate it, because it was not known how the two countries would respond.
He added that the Bank of England did not include the impact of definitions on inflation expectations “because we do not know what will happen.”
