The rate-setting Monetary Policy Committee voted in a 5 to 4 split in favour of reducing the rate, which affects a wide range of consumer loan agreements from credit card to mortgage payments.

Two members preferred to reduce bank rate by 0.5 percentage points to 4% while the other two members preferred to maintain bank rate at 4.5%.

The bank rate was held at 4.5% in March in an 8 to 1 split in favour of holding the rate.

Last week, markets predicted the base rate would be cut by a quarter point to 4.25% from 4.5%.

Deutsche Bank and the EY ITEM Club were among the many analysts who said they were “certain” the Bank’s rate-setting Monetary Policy Committee would reduce rates.

This is the fourth time the MPC has cut rates since August, with inflation currently at 2.6%, above the bank’s 2% target.

This is the MPC’s first vote since Trump imposed a range of tariffs across some 75 countries and industry sectors last month. The UK has a 10% tax on its exports to the US.

Yesterday the US Federal Reserve announced it would hold the interest rate at 4.25% to 4.5%.

In today’s monetary policy summary, it states: “Uncertainty surrounding global trade policies has intensified since the imposition of tariffs by the US and the measures taken in response by some of its trading partners.”

“There has subsequently been volatility in financial markets, and market-implied policy rates have moved lower.”

“Prospects for global growth have weakened as a result of this uncertainty and new tariff announcements, although the negative impacts on UK growth and inflation are likely to be smaller.”

Mortgage market reaction to the base rate decision to follow…