British Economy Lags Behind U.S. Following Fed Rate Cut

The British economy stays behind the U.S. after the Fed cuts rates for the first time since 2020.

In the United States, July and August CPI reports indicated very beneficial results for inflation in the economy. By early September, price growth slowed and the inflation rate reached below the satisfactory level. Thus the Fed was able to make a gigantic rate cut on Wednesday.

However, in Britain, which shares a very similar inflationary environment, inflation has not cooled just yet. According to UK data, the inflation rate stood at 2.2%, above the 2% target for the British Central Bank.

Thus, the British held on to their 5% interest rate while the Fed cut their rates. This does not exclude future opportunities for the British to cut rates; many economic experts argue that by the end of the year, the UK may in fact cut rates by substantial margins.