The bank's Monetary Policy Committee lowered the main interest rate to 4.50%, the lowest since mid-2023, amid a significant downgrade in economic growth forecasts for the UK, now predicted at only 0.75% for the year. This poses challenges for the Labour government, which aims to boost growth and living standards. Chancellor Rachel Reeves welcomed the cut but expressed dissatisfaction with the growth rate. The outlook remains uncertain due to potential inflation increases and external factors, including US tariff threats. Two MPC members voted for a larger rate cut, indicating concerns about growth headwinds.