The Bank of England's decision to cut its benchmark interest rate for a second time came as a surprise to many, but the central bank has been paving the way for the move for several months now.

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