Bank of England cuts interest rates for first time in over four years

This was CNBC's live blog covering the Bank of England's August monetary policy meeting.

LONDON — The Bank of England on Thursday delivered its first interest rate cut in more than four years, taking the key rate to 5%.

Policymakers ultimately voted 5-4 in favor of the reduction, with Governor Andrew Bailey saying that the committee would move ahead cautiously. The Bank rate had been held at a 16-year high of 5.25% since August 2023.

A lack of clear signaling from the British central bank had shrouded the decision in uncertainty until the last minute, even as markets priced in a 61% probability of a 25-basis-point reduction of its key rate at the August meeting as of 8:15 a.m. in London.

U.K. gilt yields slipped as markets began digesting the BOE's decision and the outlook for interest rates. The yield on the 10-year gilt was last down over 9 basis points to 3.880%, while the 2-year gilt yield tumbled by more than 10 basis points to 3.702%.

The BOE typically provides less forward guidance than some other central banks, and its communication was especially restricted in the recent six-week period because of the U.K. general election that took place in early July.

The Bank of England also on Thursday released its quarterly Monetary Policy Report, which contained economic growth and inflation projections. The Monetary Policy Committee will next meet to deliberate policy steps on Sept. 19, with two more meetings penciled in for November and December this year.

Bank of England Governor Andrew Bailey on Thursday said the direction for interest rates was "pretty clear."

"I think the direction of travel is ... to my mind ... pretty clear," he told CNBC's Steve Sedgwick. "I hope we'll be in a position to, you know, to see that