The benchmark interest rate has been reduced by a quarter-point by the Bank of England, bringing it down to 4.75%. This is the second time this year that borrowing costs have been lowered, as the Monetary Policy Committee, led by Governor Andrew Bailey, voted in favor of the decision.

The committee expressed concerns about the potential inflationary impact of the recent budget, which could lead to an increase in inflation by up to half a percentage point. Catherine Mann, an external member of the committee, disagreed with the decision and argued for the rate to remain at 5%.

The decision to lower rates was widely expected by economists due to ongoing concerns about economic conditions and inflationary pressures.