Voting at the Monetary Policy Committee resulted in the interest rate being cut by 0.25% to 5%. This is the first cut in interest since early 2020, though it was close.

The voting

There was an entire committee of 9 for the vote. Five voted to decrease, favouring 0.25%, and four voted to maintain at 5.25%.  

Outlook

Andrew Bailey, the Governor of the Bank of England is quoted as saying this is an important moment in time to cut interest rates but also cautioned people not to see this as as the start of a series of rate cuts.

Lower inflation is certaintly paving the way for the cut but Bailey further said it was not "mission accomplished".  Policymakers still need to be careful of cutting interest rates too quickly or by too much.

The pain for many homeowners is far from over though.  It's suggested around a 1/3 of those with a fixed rate still pay less than 3% with most coming to an end before the end of 2026.  Whilst that is still a good bit away for some, others will be coming out of that sooner and still going into a much higher rate.

Although Inflation is doing well being back at 2% it's still not great news.  Core inflation still remains high and we expect to see higher energy bills in the remaining part of the year which will push inflation upwards. 

With a new government we have still to see what impact their policies will have going forward so still a watch this space.