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The Bank of England<\/a>‘s governor has warned that rising food prices could push up inflation<\/a> to 4 per cent, after another cut to interest rates<\/a>.<\/p>\n The Monetary Policy Committee voted 5-4 for a drop of 0.25 of a percentage point, despite concerns over soaring inflation<\/a> and US president Donald Trump\u2019s tariffs.<\/p>\n The cut, which takes the rate to its lowest level since February 2023, will be seen as a positive for chancellor Rachel Reeves<\/a> as the government seeks to boost economic growth.<\/p>\n Andrew Bailey said: \u201cI still think the path is downward for interest rates<\/a>. But there is genuine uncertainty about the course of that direction… <\/p>\n \u201cHigher food inflation has contributed to overall inflation \u2013 we expect this to be about 4 per cent in September.\u201d <\/p>\n But Mr Bailey said he expected food inflation to rise until Christmas. <\/p>\n Committee members voted for a cut only after a second round of voting following an initial 4-4 split, when one member voted for a bigger cut.<\/p>\n The cut will be a boost to homeowners, but savers will be hit by lower interest on their cash.<\/p>\n Follow The Independent\u2019s live coverage of the latest stock market<\/a> and business news<\/a> here:<\/p>\n <\/a>Explained: How lower interest rate pushes up inflation<\/p>\n This encourages people to spend and so increases the rate of inflation. <\/p>\n Jane Dalton7 August 2025 14:25<\/p>\n <\/a>Blow for Reeves as Bank predicts Christmas dinner misery for millions <\/p>\n There is no such thing as a free lunch, or, in this case, a free Christmas dinner.<\/p>\n Even as he unveiled an interest rate cut that will be hailed as good news for millions of mortgage-payers, the governor of the Bank of England warned that the institution forecasts inflation will continue to rise, especially food inflation.<\/p>\n While inflation overall is predicted to peak at 4 per cent in September, food inflation will continue to rise to 5.5 per cent between now and Christmas.<\/p>\n The figures will also come as a blow to the chancellor \u2013 just days after she was warned she faces a \u00a350bn black hole in the government\u2019s finances. <\/p>\n Kate Devlin7 August 2025 14:12<\/p>\n <\/a>Guinness is helping Wetherspoons thrive \u2014 so why is its own parent company struggling?<\/p>\n Analysis: Guinness maker Diageo has been on a downward curve for three years. Now a new CEO faces a big turnaround task, writes Karl Matchett<\/p>\n Karl Matchett7 August 2025 14:00<\/p>\n <\/a>Ombudsman receives fewer complaints about scams and \u2018unaffordable\u2019 lending<\/p>\n The number of complaints about financial firms where the ombudsman was called on to step in has fallen to its lowest level in more than a year, with fewer gripes recorded about issues such as perceived unaffordable lending and fraud.<\/p>\n Between April and June, it received 10,000 new cases related to perceived irresponsible and unaffordable lending \u2013 less than half of the 21,600 complaints received a year earlier.<\/p>\n Similarly, the most complained-about issue it is currently seeing \u2013 motor finance commission \u2013 also saw a drop in complaints, from 36,000 cases between January and March to 21,500 cases processed between April and June.<\/p>\n Karl Matchett7 August 2025 13:30<\/p>\n <\/a>Bailey says path of rates uncertain<\/p>\n Bank governor Andrew Bailey said: \u201cThere are different camps who think where the neutral rate would be. <\/p>\n \u201cI still think the path is downward for interest rates. But there is genuine uncertainty about the course of that direction.<\/p>\n \u201cThe path has become more uncertain because of what we\u2019re seeing: we\u2019re seeing an upside risk with inflation, but we\u2019ve got a downside risk with the weaker labour market story. We\u2019re balancing that.<\/p>\n \u201cI certainly haven\u2019t changed my view on the direction of the path, it\u2019s more a question of what time it takes.<\/p>\n \u201cHigher food inflation has contributed to overall inflation – we expect this to be about 4% in September. There are good reasons to think this rise in headline inflation will not persist,\u201d he said.<\/p>\n Jane Dalton7 August 2025 13:14<\/p>\n <\/a>Money expert urges savers to seek out best deal: ‘Lots of fantastic options out there’<\/p>\n John Dentry, of the UK\u2019s Current Account Switch Service, has underlined the need for people to take stock of their financial situation and ensure their cash is in an account giving them as high a rate of interest as possible, even after that limit was lowered today.<\/p>\n \u201cThe Bank of England is cautiously trying to encourage economic growth. High levels of inflation have certainly complicated the picture, but reviving the economy is clearly a priority this time round,\u201d he said.<\/p>\n \u201cWhile these moments are big for the market, for consumers, its important to remember that the Banks are filled with plenty of smart analysts predicting what might happen to the base rate. This means they usually \u2018price-in\u2019 a cut before it happens, which is why you\u2019ve likely seen mortgage and savings rates gradually fall throughout the year.<\/p>\n \u201cA lot of people only look at their bank account options when rates are going upwards. Now that they\u2019re coming down, it\u2019s just as important to ensure your bank fits your financial priorities.<\/p>\n \u201cThere are lots of fantastic options out there, so make sure you\u2019re constantly reassessing your provider and finding the perfect home for your cash.\u201d<\/p>\n Karl Matchett7 August 2025 13:05<\/p>\n <\/a>No change to view on economic prospects despite raised GDP estimates<\/p>\n On raised GDP expectations, Andrew Bailey explains there\u2019s no major update in overall Bank of England view on the UK\u2019s economic prospects, but that figures pushed higher simply reflects data received over the past few months.<\/p>\n \u201cThat\u2019s all on data releases we\u2019ve had. There really isn\u2019t much of a change in our GDP profile – the change is to capture data rather than a change in view, it\u2019s just incorporating changes which aren\u2019t very big,\u201d he said.<\/p>\n \u201cIt\u2019s a very small change in the forecast compared to previously,\u201d adds fellow MPC member Clare Lombardelli.<\/p>\n Karl Matchett7 August 2025 12:56<\/p>\n <\/a>BoE: Still a downward path for interest rates<\/p>\n Andrew Bailey says there\u2019s more uncertainty over where interest rates go from here, but he still believes it will ultimately be downwards.<\/p>\n \u201cThere are different camps who think where the neutral rate would be. I still think the path is downward for interest rates. But there is genuine uncertainty about the course of that direction,\u201d he says.<\/p>\n \u201cThe path has become more uncertain because of what we\u2019re seeing: we\u2019re seeing an upside risk with inflation, but we\u2019ve got a downside risk with the weaker labour market story. We\u2019re balancing that.<\/p>\n \u201cI certainly haven\u2019t changed my view on the direction of the path, it\u2019s more a question of what time it takes.<\/p>\n \u201cMy vote was not motivated by concerns over risks for a recession.\u201d<\/p>\n Karl Matchett7 August 2025 12:49<\/p>\n