Highlights
In May 2025, the Bank of England's Monetary Policy Committee (MPC) voted narrowly to cut the Bank Rate by 0.25 percentage points to 4.25 percent, reflecting sustained progress in reducing inflation from its 2022 peak of over 11 percent to 2.6 percent in March 2025. This decision comes amid signs of slower economic growth and a softening labour market. Although inflation has eased, it is expected to rise temporarily to 3.7 percent in September, driven by energy and regulated price increases, before falling back to the 2 percent target.
The MPC faces a complex environment marked by global trade policy uncertainty, including new tariffs, which create both upside and downside risks to inflation. While falling wholesale energy prices and easing wage growth support further rate cuts, elevated inflation expectations and supply-side pressures warrant caution.
The Committee has signalled a gradual and flexible policy path, avoiding a pre-set course while remaining alert to domestic and international developments. With underlying inflation risks still present, monetary policy will remain restrictive but responsive, aiming to secure lasting price stability and support a sustainable economic recovery.
The MPC faces a complex environment marked by global trade policy uncertainty, including new tariffs, which create both upside and downside risks to inflation. While falling wholesale energy prices and easing wage growth support further rate cuts, elevated inflation expectations and supply-side pressures warrant caution.
The Committee has signalled a gradual and flexible policy path, avoiding a pre-set course while remaining alert to domestic and international developments. With underlying inflation risks still present, monetary policy will remain restrictive but responsive, aiming to secure lasting price stability and support a sustainable economic recovery.
Definition
Formerly called the Quarterly Inflation Report, the Monetary Policy Report (MPR) is produced by the Bank of England (BoE) every February, May, August and November. The publication updates the central bank's assessment of recent economic developments at home and abroad and sets out the latest official forecasts for growth and inflation. As such, it provides the economic underpinnings for any change in monetary policy made by the Bank's Monetary Policy Committee (MPC). The MPR is released at the same time as the BoE makes its policy announcement
Description
For analysts who want to know the Monetary Policy Committee's latest thinking on the economy, the MPR provides an in-depth guide. As such it offers key information on economic trends and, in particular, areas where the Bank is primarily focused. The MPR is discussed at a press conference held by the BoE governor shortly after its release.
