The Bank of England's Monetary Policy Committee (MPC) announced (external website) at midday today that UK interest rates will be cut by 150 base points, to 3%.
A second successive cut in interest rates was widely expected, following October's 50 base points cut to 4.5%. As we noted in our recent overview of the UK economic outlook (subscription required), the fragility of the UK economy now appears to outweigh even the MPC's concerns regarding its inflationary remit.
Indeed, latest data suggest that inflation may not yet have peaked, even though it is forecast to do so in the near future (subscription required for each).
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