The Bank of England cut interest rates to a near three-year low.

Bank of England lowered the key interest rate on Thursday, aligning with the pace of the Federal Reserve rather than following other European central banks. The European Central Bank has entered a period of stable borrowing costs. The Bank of England cut the key rate from 4% to 3.75%, close to the lowest level in three years, resuming a series of rate cuts since August 2024, after pausing rate cuts in November. The bank stated that borrowing costs may continue to decline in the coming months but are close to the bottom. Like their Federal Reserve counterparts, Bank of England policymakers are striving to balance inflation above target and a cooling labor market, with members of the Monetary Policy Committee holding different views on the pace at which rates should fall.