This follows its decision to cut rates in August, when the BoE’s Monetary Policy Committee (MPC) also announced the smallest possible cut of 0.25%.

It’s like wading through mud. Consumer price inflation collapsed to 1.70% in September, comfortably below the BoE’s target rate of 2%.

Given the current low inflation and growth, the MPC needs to pick up the pace to spur economic recovery.

She should have taken her chance and lowered rates at the start of the year. Right now they should be at 4%, not 4.75%.

Interest rate cuts are a brutal instrument anyway. The inflationary surge was driven by soaring energy prices and post-pandemic supply chain shortages. Hiking rates will not affect either.

All the MPC did was deepen poverty by skyrocketing borrowing costs and making homeowners, consumers and businesses feel even poorer than they already did .

Let’s not quibble though. Today’s reduction is good news and, even better, the MPC voted 8-1 in favor of making it happen.

Mortgage Lenders have been raising rates in recent weeks, now they have no excuse and hopefully they will start cutting them again.

Borrowers benefiting from variable rate mortgages and base rate trackers should therefore see their monthly payments decrease.

This gives us some respite from last week’s fiscal onslaught, although it will only go some way to reducing the impact of Labour’s £40bn tax rises.

Lower interest rate can stimulate economic activity, encourage investment and reduce borrowing costs for businesses and consumers.

We need more.

There is a risk that we will decline instead. And part of that is due to the Labor Party.

Last week, Reeves shamelessly manipulated budgetary rules to justify borrowing an extra £32 billion a year.

That has sent government bond yields soaring to 4.6%, as nervous bond market investors demand a hike. interest rate to lend to the UK.

It could go up mortgage the prices too.

Worse still, new President Donald Trump will likely revive the U.S. economy by cutting tax rates and cutting red tape.

It will also lead to higher inflation and make it more difficult for the US Federal Reserve to cut spending. interest rate. If the Fed does not dare to cut rates, the BoE will also be wary.

Before the budget and American electionMarkets expected the MPC to cut rates again at its next meeting on December 19. Not anymore. It’s a real blow.

Worryingly, markets expect inflation to start rising next year, averaging around 2.5%. This is above the BoE’s target and will dampen rate cut hopes.

Savers will be disappointed by today’s cut, as they are likely to get less from their easily accessible variable rate accounts and fixed rate bonds.

However, the current base rate of 4.75% remains significantly higher than in the dark days following the financial crisis, when it fell to just 0.25%.

I urged savers to invest in longer-term fixed rate savings bonds if they can, to lock in today’s higher rates for three to five years.

This still applies, although rates are expected to remain high for longer.

The economy is expected to grow 2% next year, boosted by Reeves’ public service splurge.

Thereafter, growth will slow to a snail’s pace, and if Donald Trump halts British exports, it could cease.

We need more rate cuts to offset this. Let’s hope the BoE has a Christmas surprise and takes them down to 4.5% next month. He needs to pick up the pace.