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# Bank of England Cuts Bank Rate to 4.00% in Narrow 5–4 Vote as Labour Market Loosens
- URL: https://www.theglobalbanker.com/bank-of-england-cuts-bank-rate-4-00-august-2025/
- Published: 2025-08-07T16:21:00.000Z
- Updated: 2026-10-27T08:52:39.000Z
- Description: The Bank of England reduced its Bank Rate by 25 basis points to 4.00% on 7 August 2025 in a 5–4 vote, despite inflation it expected to peak at 4.0% in September, as the labour market continued to loosen.
- Author: TGB Editorial Team
- Tags: Central Banks, Europe, #archive

The Bank of England's Monetary Policy Committee voted 5–4 to reduce Bank Rate by 25 basis points to 4.00% at its August 2025 meeting, announced on 7 August, according to the monetary policy summary and minutes published on the Bank's website. The decision continues the easing cycle that followed the rate-hiking cycle undertaken between December 2021 and August 2023.

Twelve-month CPI inflation stood at 3.5% in the second quarter of 2025, and the MPC projected it would rise to a peak of 4.0% in September before falling back towards the 2% target, a temporary rise it attributed to energy, food and administered prices rather than demand pressure. The MPC also noted that the labour market had continued to loosen.

#### INFLATION AND THE LABOUR MARKET

The Committee judged that underlying disinflation was continuing.

#### GUIDANCE ON THE RATE PATH

The MPC has throughout the easing cycle emphasised a meeting-by-meeting, data-dependent approach rather than committing to a predetermined path of rate reductions. The MPC said a gradual and careful approach to the further withdrawal of monetary policy restraint remained appropriate and that policy was not on a pre-set path.