UK Interest Rates Drop: What It Means for Your Wallet

The Bank of England has lowered interest rates to 3. 75%. This move was widely expected, so mortgage lenders had already adjusted their rates. However, the Bank's governor hinted that future cuts might not be as frequent, which could slow down the decline in mortgage rates. The Bank's decision was close, with four out of nine committee members voting to keep rates at 4%. Those who voted for the cut believe that weak spending and rising unemployment will keep inflation decreasing. But others are worried that services inflation and wage growth are still too high.Christmas spending is usually high, but the Bank reports that people are being careful with their money. They're focusing on getting good value for their purchases. Supermarkets are seeing smaller shopping trips, and hospitality businesses are trying to keep prices low due to weak demand. The Bank predicts that inflation will reach its 2% target by spring or summer next year, earlier than previously expected. However, economic growth is weak, and businesses are uncertain about the future. Unemployment has risen to its highest level in four years, with young workers being hit the hardest. Many employers are holding off on hiring due to uncertainty about government policies.