The Bank of England lowers interest rates for the third time this year to 4%, citing UK labor market data and slow GDP growth as reasons for the cut. Inflation expected to hit 4% in September, double the Bank’s target. Decision was a narrow one, with a 5-4 vote in favor of rate cut.

Market strategist Michael Field says Bank is taking a prudent approach with small rate cuts. UK inflation at 3.6% for June, well above the Bank’s 2% target. Bank expects inflation to peak at 4% but fall back to target by Q2 2027. No further rate cuts expected after November.

Bank of England may face challenges in delivering another rate cut in September due to rising inflation. Interest rate swaps data shows shifting sentiment, with current market pricing not expecting further rate cuts. Experts predict more cuts in autumn despite market sentiment. Bank meetings scheduled for September, November, and December.

Read more at Morningstar: Bank of England Cuts Interest Rates to 4% in Close Vote