The Bank of England is widely expected to cut interest rates for the third time in six months later Thursday, even though inflation remains above its target. Most economists think the nine-member Monetary Policy Committee will lower the bank's main interest rate by a quarter of a percentage point to 4.

New growth and inflation projections are due to be unveiled later alongside the Bank of England’s latest interest rates decision. The base rate is set to fall from 4.75% to 4.5%, in keeping with the central bank’s current once-a-quarter approach to loosening monetary policy.

The base rate peaked at 5.25% in late 2023, but policymakers reduced it to 4.75% throughout the following months. The Bank of England typically raises interest rates when inflation is high to curb spending and slow price increases.

The Bank of England looks set to cut interest rates on Thursday for only the third time since just after the start of the COVID-19 pandemic in 2020, as it juggles the need to help the sluggish economy with still-strong inflation pressures.

The Bank of England is poised to cut its benchmark interest rate to 4.5% amid the UK’s economic slowdown and ongoing inflation concerns.

The Bank of England must contend with a slowdown in Britain's economy but also stubborn inflation pressures when it considers whether to cut interest rates in early February as well as its message about the outlook for the rest of the year.

The Bank of England was widely expected to cut its key interest rate on Thursday to help support weak British growth even if UK inflation stays elevated.

Sterling dipped against the dollar on Thursday, as investors awaited the outcome of the Bank of England's meeting later on, at which the central bank is widely expected to cut rates.