Food Inflation Fears Prompt Rate Cut from Bank of England

In a bid to ease pressure on a fragile economy, the Bank of England has lowered its key interest rate to 4%. But while borrowing costs are falling, concerns about surging food prices threaten to push inflation back to 4%.
The decision came after an unusually close 5-4 vote by the Monetary Policy Committee, marking the first time in its history it required two rounds to reach consensus. Governor Andrew Bailey confirmed that while the path remains downward, further cuts are uncertain due to inflation risks.
The Chancellor praised the move, claiming that government policies have paved the way for lower rates. However, critics argue that Reeves’s tax-heavy autumn budget is exacerbating the financial strain on businesses and households.
Global disruptions and domestic policy shifts have combined to drive food prices up sharply. With unemployment rising and economic growth stalling, the Bank’s forecast warns of rising costs for essentials, amplified by higher labor expenses and environmental shocks.