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.