The interest rate cut is good news for Labour
Spectator (UK)5 days
Bank of England Cuts Interest Rates to 4.75%
Above: The Bank of England holds the central bank's Monetary Policy Report press conference Nov. 7, 2024. Image copyright: Henry Nicholls/WPA Pool via Getty Images
The Facts
The Bank of England (BoE) cut interest rates to 4.75% Thursday — a 0.25 decrease. This is the second interest rate cut by the BoE this year.
The BoE's monetary report summary said this cut, which passed by an 8-1 vote by the Monetary Policy Committee (MPC), was based upon "continued progress in disinflation" — citing, in particular, "abated" external shocks.
The Spin
Left narrative
This decision shows confidence in Chancellor of the Exchequer Rachel Reeves's pro-growth economic plan. While some will inevitably complain, and the UK economy is in dire need of a substantial overhaul, the Labour government has taken its first steps in leading the country back in the right direction and will only benefit from another interest rate cut.
Right narrative
The BoE's analysis is clear: progress has been made to reduce inflation, but Reeves's high-cost agenda is at risk of undoing the hard work of the last two years. Given Labour's spending obsession, it is likely that Bailey and the BoE will have to slow down interest rate cuts even further, placing greater financial pain on millions of homeowners and working people.