BOE Cuts Rates to 2-Year Low After Historic Re-vote

It was the first time in the panel's 28-year history that two rounds of voting were needed for an outcome on rates

- Bloomberg

The Bank of England (BOE) cut interest rates to the lowest in over two years in a closer-than-expected decision that leaves investors with what Governor Andrew Bailey called "genuine uncertainty" on its next move.

In a judgment that pitted the prospect of inflation hitting 4% against a weakening jobs market, five members of the Monetary Policy Committee voted for the quarter-point reduction to 4%, while four backed no change. That prompted markets to consider a November reduction as hanging in the balance.

The decisive second vote followed an earlier three-way split that failed to reach a majority. It was the first time in the panel's 28-year history that two rounds of voting were needed for a presentable outcome on rates.

The pound jumped against the dollar after the decision, climbing 0.5% to $1.3431. Gilts fell, sending the two-year yield six basis points higher to 3.88% as money markets reduced wagers on the extent of interest rate cuts from the BOE next year.