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| Version 3 | Version 4 |
|---|---|
| Bank hints at further rate cuts | Bank hints at further rate cuts |
| (about 2 hours later) | |
| Expectations of another rate cut have risen after the release of minutes from the Bank of England meeting at which rates were lowered from 4.5% to 3%. | |
| The Bank's nine-member committee voted unanimously for the cut on 6 November, but considered a bigger one. | The Bank's nine-member committee voted unanimously for the cut on 6 November, but considered a bigger one. |
| The Bank's own calculations showed that a cut to 2.5%, or even lower, would be needed to stop inflation falling too far below its target next year. | The Bank's own calculations showed that a cut to 2.5%, or even lower, would be needed to stop inflation falling too far below its target next year. |
| But the rate-setters decided such a big cut would come as too much of a shock. | But the rate-setters decided such a big cut would come as too much of a shock. |
| We continue to expect interest rates to fall to 1% or even below next year Jonathan Loynes, Capital Economics | We continue to expect interest rates to fall to 1% or even below next year Jonathan Loynes, Capital Economics |
| The one-and-a-half percentage point cut they agreed on was the biggest reduction since 1981, and took rates to the lowest level since 1955. | The one-and-a-half percentage point cut they agreed on was the biggest reduction since 1981, and took rates to the lowest level since 1955. |
| "It's confirming that we're going to see more rate cuts from the Bank of England, and more aggressive rate cuts," said Audrey Childe-Freeman from Brown Brothers Harriman. | "It's confirming that we're going to see more rate cuts from the Bank of England, and more aggressive rate cuts," said Audrey Childe-Freeman from Brown Brothers Harriman. |
| Currency concerns | Currency concerns |
| The minutes said that: "Some members thought there was an argument for leaving some of the required policy loosening to the months ahead to support confidence as the economy weakened." | The minutes said that: "Some members thought there was an argument for leaving some of the required policy loosening to the months ahead to support confidence as the economy weakened." |
| There was also concern that if rates had been cut by any more, there could be too sharp a fall in the value of the pound, which would create inflationary problems. | There was also concern that if rates had been cut by any more, there could be too sharp a fall in the value of the pound, which would create inflationary problems. |
| In addition, the committee's members were worried that a bigger cut could be "misinterpreted" and that this could damage its credibility. | In addition, the committee's members were worried that a bigger cut could be "misinterpreted" and that this could damage its credibility. |
| The Bank stressed that its decision was based on the government's current tax and spending plans, which meant they would have to be reconsidered after the chancellor's pre-Budget report, which will be published on Monday. | The Bank stressed that its decision was based on the government's current tax and spending plans, which meant they would have to be reconsidered after the chancellor's pre-Budget report, which will be published on Monday. |
| "We continue to expect interest rates to fall to 1% or even below next year," said Jonathan Loynes at Capital Economics. | "We continue to expect interest rates to fall to 1% or even below next year," said Jonathan Loynes at Capital Economics. |