Review: BoE Cut Rates in December, With A Razor-Thin Majority

by Brunello Rosa and Nato Balavadze

In this paper, we discuss:

• The BoE’s 25bp rate cut to 3.75%, passed by a razor-thin 5–4 vote.
• A deeply split MPC, with doves citing entrenched disinflation and hawks warning of persistent wage and services inflation;
• Governor Bailey’s message that easing will continue but become increasingly finely balanced as rates approach neutral;
• Market reaction, with gilts rallying modestly.

Download PDF: BoE Review December 2025