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Bank of England Cuts Rates Amid Rising Unemployment

12/22/2025

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Bailey Cuts Rates

The Bank of England cut its rate to 3.75%, the lowest in three years, as unemployment rises and inflation is 3.2%.
Andrew Bailey, Governor of the Bank of England, said future cuts may be limited by inflation.
The Monetary Policy Committee voted 5-4 in favor of the cut.
Chancellor Rachel Reeves' budget is expected to reduce inflation further, though concerns remain about its temporary effects.

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Streeting Advocates Trade

Health Secretary Wes Streeting advocates a deeper trading relationship with the EU to boost Britain's economy, acknowledging the hit from leaving the EU.
He suggests a customs union could be beneficial, despite the government's current stance against it.
Streeting addresses the NHS's challenges amid ongoing strikes and expresses concern for its recovery during peak flu season.
Labour faces criticism for borrowing and spending, with borrowing reaching £132 billion this year.

History

Historical Context

The Bank of England gained operational independence in 1997, allowing it to set interest rates to meet the government's inflation target of 2%. In response to the COVID-19 pandemic, the bank cut rates to a historic low of 0.1% in 2020, while Chancellor Rishi Sunak's government introduced a £350 billion support package. The current rate of 3.75% reflects ongoing inflation concerns, shaping Britain's economic recovery.

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Bailey Cuts Rates

The Bank of England cut its rate to 3.75%, the lowest in three years, as unemployment rises and inflation is 3.2%.
Andrew Bailey, Governor of the Bank of England, said future cuts may be limited by inflation.
The Monetary Policy Committee voted 5-4 in favor of the cut.
Chancellor Rachel Reeves' budget is expected to reduce inflation further, though concerns remain about its temporary effects.

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