The Bank of England (BoE) cut its key interest rate to 3.75% on Thursday after U.K. inflation eased more than expected, while the European Central Bank (ECB) held interest rates steady at 2% for its fourth meeting in a row.
"We've passed the recent peak in inflation, and it has continued to fall, so we have cut interest rates," BoE Governor Andrew Bailey said.
The widely expected quarter-point reduction followed a regular policy meeting and came slightly ahead of the ECB's rate decision.
Expectations for the reduction were cemented by official data on Wednesday showing Britain's annual inflation rate had slowed more than expected to 3.2% in November.
Analysts forecast the BoE to cut borrowing costs further next year
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