LONDON ― The Bank of England cut its key interest rate for the first time in more than four years, saying the U.K. economy has cooled enough to justify a modest relaxation of monetary policy. 

The Bank’s Monetary Policy Committee voted 5-4 in favor of cutting the Bank Rate by 0.25 of a percentage point to 5 percent. It had stood at 5.25 percent for a full year. 

The Bank "expects the fall in headline inflation, and normalization in many indicators of inflation expectations, to continue to feed through to weaker pay and price-setting dynamics," it said in a statement. "A margin of slack should emerge in the economy as GDP falls below potential and the labor market eases further." 

Financial markets had largely expected the move, although there remained questions about whether the Bank would err on the side of caution for another month. 

Bank Governor Andrew Bailey will explain the MPC’s thinking at a press conference at 12:30 p.m. U.K. time.