Bank of England cuts rates amid slowing UK economy

Friday, December 12, 2025 at 13:00 UTC+01:00 (+0100), United Kingdom, London

News category : Macroeconomic Events

On December 12, 2025, the Bank of England announced a 25-basis-point reduction in its benchmark interest rate, marking its first rate cut since early 2024. Policymakers pointed to slowing economic momentum, softening labor market indicators, and continued progress on inflation as justification for easing. The Monetary Policy Committee emphasized that while inflation risks have moderated, uncertainty remains around wage growth and global demand conditions. Governor Andrew Bailey noted that policy would remain flexible and data-dependent. The decision had broad implications for UK government bond yields, equity valuations, and sterling exchange rates, while also influencing expectations for further easing across developed markets in 2026.

Overall market impact

Strong bullish market impact - strength score : 95/100

Detailed breakdown of market impact over instruments, sectors, and asset classes

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Impacted instruments :

UK gilts

FTSE equities

GBP FX

European credit markets

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