Bank of England Cuts Interest Rates to 3.75%

Today the Bank of England’s Monetary Policy Committee voted to reduce the base interest rate from 4% to 3.75%, bringing borrowing costs to their lowest level in almost three years. The decision came in a narrow 5-4 vote as inflation continues to ease, with the Consumer Prices Index falling to around 3.2% in November, though it still sits above the Bank’s 2% target. 

For many businesses and households, the cut should ease borrowing costs and provide some breathing room, especially for those with variable-rate loans and mortgages linked to the Bank Rate. From a business perspective, lower interest rates can help support investment and cash flow as firms plan for 2026.