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Bank of England could signal faster rate cuts after Trump tariffs

  • The Bank of England is set to cut its base interest rate by 25 basis points to 4.25% at the Monetary Policy Committee meeting on 8 May 2025 in response to global economic pressures.
  • This rate cut follows disruptions from US tariffs imposed by Donald Trump last month, which have rattled markets and reduced growth forecasts for the UK economy.
  • Economists from Barclays and Morgan Stanley predict several further cuts through 2025, potentially lowering the base rate to as low as 2.75%, reflecting market expectations of a swift easing cycle.
  • Barclays expects four consecutive cuts starting in May, with mortgage rates already trimmed by up to 0.25 percentage points, making potential savings over £500 annually on typical loans.
  • These reductions offer relief to borrowers amid sluggish growth and inflation above the 2% target, but the Bank remains cautious about inflation risks and the possibility of a prolonged global downturn.
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Bloomberg broke the news in United States on Thursday, May 1, 2025.
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