From Yahoo Finance: 2025-05-08 13:07:00

The Bank of England cut interest rates by a quarter point to 4.25%, warning of a further 0.3% economic slowdown over three years. Growth is expected to be stagnant due to global trade uncertainty. Markets anticipate two more rate cuts this year, but inflation could limit further reductions.

Despite cautious optimism, the Bank welcomed a trade deal between Keir Starmer and Donald Trump, reducing charges on exports in exchange for concessions. However, the UK economy will still feel the effects of the global slowdown caused by the trade war. Inflation is expected to peak at 3.5% this year, affecting consumer spending.

The Trades Union Congress urged more aggressive rate cuts to ease pressure on households and businesses amid lower economic growth projections. The Bank’s outlook reflects weakening consumer and business confidence, leading to subdued growth in business investment and productivity. Goldman Sachs noted the Bank’s hesitancy to cut rates as expected.

Read more: UK interest rates fall to 4.25% as Bank of England announces a quarter-point cut