"The Bank of England (BoE)'s announcement today of a 0.25% cut to the base rate, bringing it down to 4.5%, was probable, given the slow economic growth we've seen in recent months. The economy had grown only 0.1% at the time of the last rate decision in December and figures today aren't much different.
"The new rate is likely to encourage optimism regarding employment levels. While recent reports have shown UK businesses cutting roles at the fastest pace since 2009, lower rates may help improve the job market.
"Falling or stable interest rates naturally make financing easier for buyouts, and the private equity outlook is optimistic for a reason, especially with private credit set to grow as demand for flexible financing rises. However, expectations of increased dealmaking and exit activity will only strengthen with rate cuts. Experts currently predict two to five cuts this year, and with the EU already benefitting from lower rates, the BoE will be looking to boost economic growth as quickly as possible, whilst remaining measured and playing the long game."
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