The Bank of England lowered its key interest rate for the fifth time in a year as it seeks to balance a recent pickup in inflation against a cooling jobs market, a challenge that also confronts the Federal Reserve.

The key point

The U.K.’s central bank lowered its key rate to 4% from 4.25%, having made the first cut in this series in August 2024, when borrowing costs stood at 5.25%. Policymakers repeated their pledge to continue to remove the restraints they have placed on economic activity at a “careful and gradual” pace.