Bank of England expected to cut interest rates | Global News Avenue

Later, the Bank of England is expected to cut interest rates, a move closely watched by families and economists.

Analysts predict that benchmark rate will drop from 4.75% to 4.5% given the recent weakness of the UK economy Growth is slow.

The bank uses interest rates as its main tool to control inflation, which has now exceeded the bank’s target. However, inflation Unexpectedly dipped at the end of last yearincrease expectations for lowering tax rates.

but Threat use of tariffs.

If he does raise import taxes to the state, it can It leads to inflationary pressures worldwide, thus creating a chain reaction to the rise in prices in the UK.

The bank will increase and fall in fees to control inflation, which measures how fast the total price will rise.

By raising interest rates, borrowing becomes more expensive, so people spend less money. It may also encourage people to save more.

This, in turn, reduces demand for commodities and slows down the price increase.

But it’s a balanced act – increasing the risk of borrowing costs can harm the economy as it prevents businesses from investing and creating more jobs.

Once the price rises, the bank will consider lowering interest rates.

Its base rate seriously affects the interest rates of High Street banks and other lenders, charging customers for loans, credit cards and other financing transactions.

This is the most obvious mortgage cost.

About 629,000 households have “tracker” transactions and will immediately lower the tax rate. Typically, their monthly repayments will drop by about £29 due to an expected 0.25 percentage points later.

Similar numbers of residents have variable interest rate transactions, and if banks lower the base interest rate, lenders will be under pressure to lower interest rates.

Fixed interest rate transactions will not change immediately, but expectations for further tax reductions may lead to better deals for new or newer borrowers.

Savers will be hit by a drop in base interest rates as returns they receive from banks are likely to be cut.

The bank’s governor Andrew Bailey said in December that it would take a “step-by-step approach to lowering future interest rates.”

But he added: “We cannot promise when or how much tax rates will be reduced in the coming year.”

Following the meeting, the bank said “there is uncertainty around how the measures announced in the fall budget affect growth”.

After the meeting in November, Mr Bailey will not be learned by the impact of Trump’s tariffs on the UK economy and said “Let’s wait and see.”

In the United States, the central bank (Fed) said it was slower this year.

When the bank announces its interest rate decision at 12:00, it will also share a report to see where its inflation rate is in the coming months and may prompt its strategy.

Paul Dales, an economist in capital economics, told the BBC that lowering UK interest rates would strike a balance between supporting an economy that seems to have stopped completely and preventing inflation from taking off again.

“Trump tariffs are unlikely to affect UK interest rates,” he added. But wages are growing faster than banks’ forecasts have affected its decisions.

British Economy Growth is less than November’s expectedafter not growing at all in the past two months. As budget changes (such as national insurance contributions and higher minimum wages), businesses are expected to slow further as a result of increased costs from April.