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 cut its main interest rate by a quarter of a percentage point to 4.75% on Thursday after inflation across the U.K. fell significantly, relieving some pressure on borrowers who have faced elevated mortgage and loan costs.

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.