Key points
- Federal Reserve has decided to freeze US borrowing costs
- European Central Bank had also reduced eurozone interest rates last month
- Britain faces 10pc tariffs
ISLAMABAD: The Bank of England (BoE) on Thursday cut its key interest rate by a quarter point to 4.25 percent as the threat of US tariffs starts to weigh on economic growth.
“Prospects for global growth have weakened as a result of… tariff announcements,” AFP cited the BoE’s statement as saying.
It follows the Federal Reserve’s decision Wednesday to freeze US borrowing costs and last month’s move by the European Central Bank to cut eurozone interest rates, AFP reported.
Europe Day
With the rate cut priced in by markets, investors will be looking for any shift in language by the BoE’s Monetary Policy Committee that could hint at further reductions this year.
Britain is facing 10 per cent tariffs on most of its goods exported to the United States (US), its second-largest trading partner after the European Union.
Britain’s economy
Bank of England governor Andrew Bailey has insisted that Trump’s trade assault could hurt Britain’s economy even if the country avoided the heaviest tariffs, according to AFP.
Reuters reported that the Bank of England has cut rates just three times so far since last August, moving more slowly than the US Federal Reserve and the European Central Bank due to its concerns regarding inflationary heat in the jobs market.
Although Britain’s economy is far from robust, its growth this year looks set to be faster than in Germany and France, according to Reuters.
