BOE Cuts Key Interest Rate    12/18 06:33

   The Bank of England on Thursday cut its key interest rate for the first time 
in four months amid signs that the stubbornly high inflation that has plagued 
British consumers and businesses is beginning to ease.

   LONDON (AP) -- The Bank of England on Thursday cut its key interest rate for 
the first time in four months amid signs that the stubbornly high inflation 
that has plagued British consumers and businesses is beginning to ease.

   Policymakers at Britain's central bank voted 5-4 to reduce the base rate by 
a quarter of a percentage point to 3.75% on Thursday, the lowest since February 
2023.

   The move came a day after the Office for National Statistics reported that 
consumer price inflation slowed to 3.2% in the 12 months through November, from 
3.6% a month earlier.

   The figure was below the Bank of England's forecast of 3.4%. That gave 
policymakers room to cut interest rates in an effort to bolster Britain's 
stagnant economy. Statistics released earlier this week showed a weakening jobs 
market, with the number of job vacancies declining and the unemployment rate 
rising to 5.1%, the highest since January 2021.

   Even so, the bank's Monetary Policy Committee was divided on whether to cut 
interest rates, with four members remaining focused on the fight against 
inflation, which is still well above the Bank of England's 2% target.

   British consumer prices are also rising faster than in other parts of Europe 
and North America. The inflation rate in the 20 European countries that use the 
euro currency remained at 2.1% in November. The U.S. inflation rate was 3.0% in 
September, the latest figures released due to the government shutdown.

   Lower interest rates help spur economic growth by reducing borrowing costs, 
which can lead to increased spending by consumers and boost investment by 
businesses. But that can also fuel higher prices.

   Central bankers have to weigh those competing forces, trying to prevent 
inflation from eroding the value of earnings and savings without putting an 
unnecessary brake on economic growth.