Bank of England cuts main interest rate by 0.25% to 4.25% in face of US tariff uncertainty

The Bank of England cut its main interest rate by a quarter of a percentage point to 4.25% amid concerns over the potential shock to global growth emanating from the tariff policies of the Trump administration.
The decision yesterday was widely expected, though there was an array of opinion on the nine-member Monetary Policy Committee, with two voting for a bigger half-point cut to 4%, and two voting to hold rates.
Bank Gov. Andrew Bailey said inflationary pressures have continued to ease, paving the way for the fourth quarter-point rate cut since August.
“The past few weeks have shown how unpredictable the global economy can be,” he said. “That’s why we need to stick to a gradual and careful approach to further rate cuts.
Ensuring low and stable inflation is our top priority.”
The decision is the first since President Donald Trump made his tariff announcement in early April.
Though most tariffs were paused for 90 days following the ensuing market turmoil, including the 10% baseline tariff applied to U.K. goods entering the U.S., the backdrop for the global economy remains highly uncertain.
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