Bank of England Cuts Interest Rates: How Will Crypto Prices React?

The Bank of England has reduced its key interest rate to 4%, marking the fifth cut since August 2024. Governor Andrew Bailey described the decision as "finely balanced," with the Monetary Policy Committee narrowly voting 5-4 in favor. One member even advocated for a deeper cut to 3.75%. The UK's economic landscape remains mixed—June inflation ROSE to 3.6%, while unemployment climbed to 4.7%. The central bank projects inflation will peak at 4% in September before gradually declining to its 2% target by 2027.

Households grapple with rising costs—food, energy, and taxes—eroding confidence in inflation forecasts. The BOE plans cautious, incremental rate cuts, contingent on upcoming food inflation trends. Cryptocurrencies often react to such monetary policy shifts, though the timing and magnitude of their response remain unpredictable. Market participants will watch for Ripple effects across BTC, ETH, and other digital assets as liquidity conditions evolve.