The Bank of England has cut the base rate by a widely expected 0.25% to 4.25%.

The rate-setting Monetary Policy Committee voted in a 5 to 4 split in favour of reducing the rate, which affects a wide range of consumer loan agreements from credit card to mortgage payments.

Two members preferred to reduce bank rate by 0.5 percentage points to 4% while the other two members preferred to maintain bank rate at 4.5%.

The bank rate was held at 4.5% in March in an 8 to 1 split in favour of holding the rate.

Last week, markets predicted the base rate would be cut by a quarter point to 4.25% from 4.5%.

Deutsche Bank and the EY ITEM Club were among the many analysts who said they were “certain” the Bank’s rate-setting Monetary Policy Committee would reduce rates.

This is the fourth time the MPC has cut rates since August, with inflation currently at 2.6%, above the bank’s 2% target.

This is the MPC’s first vote since Trump imposed a range of tariffs across some 75 countries and industry sectors last month. The UK has a 10% tax on its exports to the US.

Yesterday the US Federal Reserve announced it would hold the interest rate at 4.25% to 4.5%.

Mortgage market reaction to the base rate decision to follow…

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