The Bank of England has made a significant decision to cut the main interest rate to 4.5% in response to a deteriorating economic outlook, halving its growth projection for the UK. This move comes as the British economy shows signs of stagnation, leading to a decline in the value of the pound and boosting the FTSE 100 index to record highs. Governor Andrew Bailey has warned of potential inflation risks and the impacts of global trade tensions, including threats of tariffs. The decision is seen as both a necessary boost for home buyers and a response to the challenging economic conditions ahead, with market analysts raising concerns over the implications of extended stagflation. As the central bank grapples with the complexities of navigating interest rates in this tough economic environment, the outlook remains uncertain.