{"id":712,"date":"2025-08-08T13:50:47","date_gmt":"2025-08-08T13:50:47","guid":{"rendered":"https:\/\/tona.today\/?p=712"},"modified":"2025-08-08T14:06:57","modified_gmt":"2025-08-08T14:06:57","slug":"bank-of-england-cuts-rate-amid-tariff-concerns","status":"publish","type":"post","link":"https:\/\/tona.today\/?p=712","title":{"rendered":"Bank of England cuts rate amid tariff concerns"},"content":{"rendered":"\n<p>The Bank of England on Thursday cut its key interest rate by a quarter point to four percent, the lowest level in 2.5 years, as it bids to boost a UK economy threatened by US tariffs.<\/p>\n\n\n\n<p>Alongside the expected decision, the BoE forecast British economic growth to hit 1.25 percent this year, slightly better than the central bank\u2019s previous estimate of one percent.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Asake - Organise (Official Video)\" width=\"980\" height=\"551\" src=\"https:\/\/www.youtube.com\/embed\/_u4_iWCvZ5c?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>\u201cThe direct impact of US tariffs is milder than feared, but more general tariff-related uncertainty still weighs on sentiment,\u201d the BoE said in a statement after studying data gathered by UK businesses.<\/p>\n\n\n\n<p>London and Washington reached an agreement in May to cut levies of more than 10 percent imposed by US President Donald Trump on certain UK-made items imported by the United States, notably vehicles.<\/p>\n\n\n\n<p>The quarter-point cut on Thursday was the BoE\u2019s fifth such reduction since starting a trimming cycle in August 2024.<\/p>\n\n\n\n<p>\u201cInterest rates are still on a downward path, but any future rate cuts will need to be made gradually and carefully,\u201d its governor, Andrew Bailey, said following Thursday\u2019s decision.<\/p>\n\n\n\n<p>The BoE voted 5-4 for the reduction, but not before an unprecedented second vote owing to a three-way split among its nine policymakers that prevented a necessary majority result.<\/p>\n\n\n\n<p>Initially, four members voted for the reduction and four for no change. One member called for a larger cut of 0.50 percent, before switching in favour of a quarter-point drop, as voted for by Bailey.<\/p>\n\n\n\n<p>It was the first time since the BoE became independent of the UK government in 1997 that a second vote had to be held.<\/p>\n\n\n\n<p>\u201cLooking ahead, interest rates are expected to be 3.5 percent in a year, which is slightly higher than before the (latest) meeting,\u201d noted Kathleen Brooks, research director at XTB trading group.<\/p>\n\n\n\n<p>Expectations that the rate will remain at four percent for longer boosted the British pound.<\/p>\n\n\n\n<p>The BoE\u2019s main task is to keep Britain\u2019s annual inflation rate at 2.0 percent, but the latest official data showed it had jumped unexpectedly to an 18-month high in June.<\/p>\n\n\n\n<p>The Consumer Prices Index increased to 3.6 percent as motor fuel and food prices stayed high.<\/p>\n\n\n\n<p>The BoE on Thursday predicted that the annual inflation rate would peak at four percent next month.<\/p>\n\n\n\n<p>Latest official figures show that Britain\u2019s economy unexpectedly contracted for a second month running in May, and UK unemployment is at a near four-year high of 4.7 percent.<\/p>\n\n\n\n<p>This is largely down to Prime Minister Keir Starmer\u2019s Labour government increasing a UK business tax from April, the same month that the country became subject to Trump\u2019s 10-percent baseline tariff on most goods.<\/p>\n\n\n\n<p>Finance minister Rachel Reeves welcomed the latest rate cut, saying in a statement that it helps to \u201cbring down the cost of mortgages and loans for families and businesses\u201d.<\/p>\n\n\n\n<p>The US Federal Reserve last week kept interest rates unchanged, defying strong political pressure from Trump to slash borrowing costs in a bid to boost the world\u2019s biggest economy.<\/p>\n\n\n\n<p>Asked about US tariffs following the decision, Fed Chair Jerome Powell told a press conference: \u201cWe\u2019re still a ways away from seeing where things settle down.\u201d<\/p>\n\n\n\n<p>The European Central Bank is meanwhile widely expected to keep rates unchanged at its next meeting, with eurozone inflation around the ECB\u2019s two-percent target.<\/p>\n\n\n\n<p>But that could change, according to some economists, based on how Trump\u2019s tariffs affect the single-currency bloc. <a href=\"https:\/\/punchng.com\/bank-of-england-cuts-rate-amid-tariff-concerns\/\">(Punch)<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Bank of England on Thursday cut its key interest rate by a quarter point to four percent, the lowest level in 2.5 years, as it bids to boost a UK economy threatened by US tariffs. Alongside the expected decision, the BoE forecast British economic growth to hit 1.25 percent this year, slightly better than [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":675,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[874,875,876,557,257,527,85,57,877],"class_list":["post-712","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-foreign","tag-bank-of-england","tag-british-pound","tag-european-central-bank","tag-keir-starmer","tag-rachel-reeves","tag-tariffs","tag-united-kingdom","tag-united-states","tag-us-federal-reserve"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Bank of England cuts rate amid tariff concerns - Tona Today<\/title>\n<meta name=\"description\" content=\"The Bank of England on Thursday cut its key interest rate by a quarter point to four percent, the lowest level in 2.5 years, as it\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tona.today\/?p=712\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bank of England cuts rate amid tariff concerns - 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