Bank of England Chief Economist Huw Pill said labour market data released earlier on Tuesday showed inflation pressures in Britain remained too high for the BoE's 2% inflation target.

U.K. wages rose at a slower pace in September, opening the way for further rate cuts from the Bank of England.

The central bank said future cuts would be gradual amid higher inflation forecasts after the new government introduced spending and tax increases in its budget.

LONDON, Nov 7 (Reuters) - The Bank of England cut interest rates on Thursday for only the second time since 2020 and said future reductions were likely to be gradual, seeing higher inflation and growth after the new government's first budget.

The Bank of England has cut its main interest rate by a quarter of a percentage point after inflation across the U.K. fell below its target rate of 2%.

The outcome of the Monetary Policy Committee meeting was announced at midday today. Stay up to date with live reporting and analysis from the team at MoneyWeek.

Interest rates have been cut for the second time this year, by a quarter of a percentage poi, but mortgage rates are still set to rise in a blow to homeowners. The Bank of England reduced the base rate from 5 per cent to 4.75 per cent on Thursday, following a 0.25 percentage-point cut in August, which was the first drop in four years.

The markets and economists expect the Bank of England will cut its bank rate by 25 basis point to 4.75% on Thursday. It will be the second such reduction in borrowing costs since the U.K. central bank began easing policy in August.

The Bank of England cut interest rates but pointed to the uncertainty facing the global economy from fresh trade barriers and Middle East conflict