Bank of England on Thursday cut off the main interest rate by a quarter point at 4.25 percent while the threat of US tariffs begins to weigh economic growth.
The fourth bank of the central reduction in the nine months, which the markets widened, in contrast to a US Federal Reserve decision on Wednesday to freeze borrowing costs.
Meanwhile, an update to the Bank of England came shortly after Donald Trump announced an agreement with Britain on Trade, the first of such a deal since the US President of the US launched his global tariffs Blitz.
“This will be good news throughout the round, including the UK economy,” Boe Governor Andrew Bailey said at a press conference following a decision on rate.
“This will help reduce uncertainty,” he added.
Following a regular meeting in London, Boe noted that the “prospects for global growth have weakened as a result of … tariff announcements”.
However, Boe has climbed its forecast for annual gross domestic product growth this year, by a percentage of 0.75 percent.
It said the British -economic output was predicted to reach 1.25 percent next year, from an earlier estimate of the middle bank of 1.5 percent given in February.
Avoid inflation
“Trade-related developments in financial markets are usually pushed into growth,” Boe Thursday added.
Britain faces 10-percent tariffs on most goods exported to the United States, the second largest largest trading partner after the European Union.
Bailey said the prevention of inflationary pressure, assisted by the collapse of oil prices at the end of Trump's tariffs, contributed to the bank's decision to cut.
“The past few weeks have shown how the global economy cannot be predicted.
With the latest cut rate priced by markets, investors are looking for any transfer to the BOE financial policy committee that states further cuts this year.
The minutes of the meeting “emphasize the ongoing careful approach to cutting interest rates favored by MPC members”, Yael Selfin, chief economist at KPMG UK, said.
Analysts said they expect Boe to maintain the current easing speed, which has seen a quarter-point cut every three months since August.
Bank of England's latest announcement rate took place at 11:02 GMT, two minutes later than before as the UK silenced to mark the 80th anniversary of European day victory.
Also Thursday, the central banks of Norway and Sweden have maintained their major interest rates unchanged while signing future cuts is possible amid economic uncertainty.
The European Central Bank cut off eurozone borrowing costs last month.
This story was originally featured on Fortune.com
