Bank Of England Cuts Key Rates By 25 Bps

(RTTNews) - The Bank of England reduced its interest rate by a quarter-point on Thursday citing progress on disinflation path.

The Monetary Policy Committee voted 7-2 to reduce the benchmark bank rate to 4.50 percent from 4.75 percent. The decision came in line with expectations.

Previously, the BoE had reduced the rate by 25 basis points each in August and November last year.

Today, Swati Dhingra and Catherine Mann called for a bigger rate cut of half percentage point.

The MPC judged that there has been sufficient progress on disinflation in domestic prices and wages to reduce Bank Rate to 4.5 percent at this meeting.

The committee said a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate.

"Monetary policy would need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term had dissipated further," the bank said.

The MPC would decide the appropriate degree of monetary policy restrictiveness at each meeting, BoE added.