Bank of England cuts interest rate, interest rates come down to 5 percent:

England : The Bank of England (BoE) has cut interest rates. After the cut, the rates have come down from the 16-year high. Interest rates have come down by a quarter point to 5 per cent. Governor Andrew Bailey supported this. However, the decision to cut interest rates was taken based on voting. 5 members of the committee were in favour of reducing interest rates. Whereas 4 members believed that the inflation rate is not low enough yet.

The governor said that the BoE's Monetary Policy Committee will be cautious going forward regarding reducing interest rates. We need to ensure that inflation remains low, and be careful not to cut interest rates too quickly or too much.

The market supported

England's stock market has supported BoE's decision to lower interest rates. Blue-chip FTSE 100 shares have seen a rise of 0.3 per cent. The FTSE 250 midcap index has also gained 0.5 per cent. This is the highest in the last two years.

The next cut may happen by November

"If you look at the headlines that Governor Bailey has been preparing for, the caution against cutting too much too soon or too much, I think they are looking at a steady quarterly pace of cuts," said Colin Asher, an economist at Mizuho Bank, regarding the bank rate cut. Colin further says that macroeconomic developments will also be seen in the coming days. Therefore, I am expecting the next rate cut, possibly in November.