Blimey, talk about scraping the barrel!
In a nail-biting 5-4 split – with Governor Andrew Bailey tipping the scales like the swing voter he loves to be – the Bank of England's Monetary Policy Committee finally bowed to reality today and slashed the base rate by a measly 0.25% to 3.75%. Four hawks dug in their heels to keep it at 4%, terrified of lingering inflation ghosts.
This is the fourth cut of 2025, the lowest level since early 2023, and a pre-Christmas crumb for mortgaged families and battered businesses. Rachel Reeves is already crowing about it being the "sixth since the election" and "good news" – yeah, love, because your £40bn tax tsunami made it bloody necessary!
Let's not kid ourselves: this timid trim is damage control for the economic carnage unleashed by Reeves's Autumn Budget bombshell. Her employers' NI hammer, inheritance tax raids, and non-dom purge froze investment, spiked unemployment to a near-five-year high of 5.1%, and delivered back-to-back GDP contractions. The ONS's grim growth figures and jobs bloodbath screamed "cut now!" – yet it took a razor-thin majority to act.
The grim backdrop that forced their hand:
- Inflation tumbled to 3.2% in November (sharper than forecast)
- Unemployment at 5.1%, payrolled workers down 38,000
- GDP shrank 0.1% in September and October – stagnation city
- Private sector wage growth lagging while the public sector parasites feast
- Services inflation easing, but still sticky enough for the hawks to squawk
This isn't generosity from Threadneedle Street; it's a desperate patch-up job on the holes Reeves blasted in the hull. Her "tough choices" weaponised uncertainty, scared off hiring, and squeezed the private sector dry to feed the bloated state machine. Real people – businesses delaying expansions, families remortgaging into pain – have been yelling for relief for months, while the BoE dithered.
A full percentage point off since summer? Pathetic when you consider the self-inflicted wounds from Labour's fiscal folly. Further cuts in 2026? The MPC's muttering about a "gradual downward path" and "closer calls" ahead – translation: don't hold your breath for bold moves while Reeves keeps stoking inflationary fires with her big-state bloat.
This cut might shave a few quid off tracker mortgages and ease some loan pain, but it's no cure for the underlying disease: a Chancellor hell-bent on taxing wealth creators into oblivion.
Stay vigilant, folks. Shield your finances, diversify, and remember – this mess is homemade in Downing Street.
Amazon Suggested Reads – Defend Your Wallet from the Next Onslaught
- “The Interest Rate Trap” – how central banks bail out bad policy
- “Taxed Into Stagnation” – Reeves's roadmap to recession
- “Protect Your Mortgage in Labour's Britain” – essential survival strategies
Ken Frost
Professional Cynic, Chartered Accountant and unyielding Loanbuster
www.kenfrost.net – busting fiscal fantasies since 2005
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