Prime Minister Sir Keir Starmer has publicly welcomed the Bank of England's decision to cut interest rates, marking the sixth reduction since the general election.
Bank of England Announces Latest Cut
The central bank revealed on December 18 that it was lowering the base rate from four per cent to 3.75 per cent. This move continues a trend of monetary policy easing initiated in recent months.
The announcement follows Chancellor Rachel Reeves's delivery of the government's Autumn Budget, which outlined a series of economic reforms.
Prime Minister's Response to the News
Responding to the development, Sir Keir Starmer issued a statement on social media platform X at noon. He framed the cut as positive news for households across the nation.
"We’ve now had the sixth interest rate cut since the election. This is welcome news for working families across the country," the Prime Minister stated.
He linked the decision to the government's broader efforts to tackle the cost of living crisis, citing specific policies:
- Expanding free breakfast clubs.
- Cutting £150 off the average energy bill next year.
- Freezing rail fares.
Sir Keir acknowledged ongoing pressures, adding: "I know there's families who are still struggling - we are taking action to bring costs down."
Chancellor and Economist Weigh In
Chancellor Rachel Reeves echoed the Prime Minister's sentiments, noting the pace of the cuts. "This is the sixth interest rate cut since the election – that’s the fastest pace of cuts in 17 years," she said, describing it as good news for mortgage holders and businesses.
However, she also stressed that more work is needed, pointing to the Budget's measures on rail fares, prescription charges, and energy bills.
Economist Sylvain Broyer of S&P Global Ratings offered a note of caution. "Today’s cut doesn’t change the BoE’s dilemma," he said, warning that underlying price pressures persist due to real wages growing faster than productivity.
Broyer predicted limited scope for further easing, suggesting just one more cut before spring 2026.
