Bank of England cuts key interest rate to 3.75% amid easing inflation

London, Dec 18, 2025

The Bank of England on Thursday cut its key interest rate for the first time in four months amid signs that the stubbornly high inflation that has plagued British consumers and businesses is beginning to ease.

Policymakers at Britain's central bank voted 5-4 to reduce the base rate by a quarter of a percentage point to 3.75 per cent, the lowest since February 2023.

The move came a day after data showed consumer price inflation slowed to 3.2 per cent in the 12 months through November.

The figure was below the Bank of England's forecast, giving policymakers room to cut interest rates to bolster Britain's stagnant economy.

Statistics released earlier this week showed a weakening jobs market, with the unemployment rate rising to 5.1 per cent.

The Monetary Policy Committee remained divided, with some members focused on the risk of inflation staying above the 2 per cent target.

Lower interest rates help spur economic growth by reducing borrowing costs, but can also fuel higher prices.

[Associated Press]