(fxcue news) - The Bank of England reduced its benchmark rate for the second time this year citing continued progress in disinflation but suggested that further easing is set to be gradual as the last week's budget has upward impact on inflation. The Monetary Policy Committee decided to lower the rate by 25 basis points to 4.75 percent. The outcome of the two-day meeting matched expectations. Previously, the U.K. central bank had reduced the policy rate by a quarter-point in August, which was the first reduction since March 2020. At the November meeting, Governor Andrew Bailey and seven other members voted for a 25 basis points cut, while policymaker Catherine Mann alone voted to maintain the rate at 5.00 percent. The MPC said a 'gradual approach' to removing policy restraint remains appropriate. Bailey said, "We need to make sure inflation stays close to target, so we can't cut interest rates too quickly or by too much." The BoE repeated that the monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2 percent target in the medium term have dissipated further. Headline CPI inflation is forecast to rise to 2.5 percent by December and it is projected to peak at 2.8 percent in the third quarter of 2025. In two years' time, inflation is seen at 2.2 percent. The Autumn budget is expected to boost inflation by just under half a percentage point at its peak. The BoE estimated that the budget will boost the level of GDP by 0.75 percent next year. The future path of U.K. interest rates was complicated by Chancellor Rachel Reeves Autumn Budget announcement a week ago and the outcome of the US presidential election this week. The increase in British government spending, as planned by Reeves, has limited the ability of the central bank to cut the policy rate further. ING economist James Smith said the BoE will keep rates on hold in December but accelerate the pace of cuts from February. The U.S. Federal Reserve is also expected to cut its key interest rate later today, a day after Donald Trump won the presidential race.