BoE Cuts Rates to 4%, But Shoppers Brace for Higher Grocery Bills

The Bank of England has made its fifth interest rate cut in a year, lowering borrowing costs to 4%. However, this move comes amid growing concern that food inflation could drive overall prices back up.
The MPC’s close 5-4 vote reveals just how divided policymakers are. It’s the first time in history the panel has had to vote twice to reach a consensus, reflecting the seriousness of the situation.
Bailey said the downward path for rates remains intact but warned that progress may be slowed by inflation. The biggest contributor? Rapidly rising food prices.
According to the Bank, food inflation could hit 5.5% this year, with labor costs and climate shocks playing a central role. New government-imposed charges are also adding to the burden on businesses and shoppers.
While the Chancellor touted the rate cut as a victory, critics say her policies are inadvertently worsening inflation—making the fight against the cost-of-living crisis even harder.