The Bank of England made the first reduction in interest rates in 2025. The bank's council approved the reduction of rates to 0.25% from 0.5%. This is the first change in rates since the increase to 0.5% in December 2024.
*The Bank of England stated:* "The current decision reflects the uncertainty in the economy due to rising inflationary pressures caused by price increases for energy sources and food products. With lower rates, we aim to support economic growth and ensure price stability."
This rate reduction will help lessen the burden on borrowers, including mortgage borrowers, as well as credit card holders. According to economists, this step allows to stimulate economic activity, since lower rates usually lead to increased spending and investments.
On the other hand, some experts express concerns about the potential increase in inflation due to the rate cuts and call for balancing between supporting economic growth and managing inflation.
Similar actions by central banks are closely analyzed by the business community and consumers, as they directly affect the financial situation in the country, including lending, investments, and price growth for goods and services. It can be expected that future actions of the bank will be closely monitored and analyzed by economic experts and the public.
