Interest rates have been cut to 4.25 per cent. The Bank of England’s Monetary Policy Committee (MPC) voted by five to four for what will be the fourth rate reduction since August. The decision breaks with the direction of the US Federal Reserve, which held rates yesterday after refusing to bow to pressure from President Donald Trump who wants to see rates cut. Jerome Powell, the Fed’s chairman, said America’s economy was ‘highly uncertain’ making it difficult to push ahead with a rate reduction.
The government will hope that a trade deal will free Britain from the worst effects of the tariff war
Back home, analysts are now anticipating the sharpest fall in the cost of borrowing since the financial crisis. Already mortgage rates have been tumbling, with the average five-year fixed deal at 5.08 per cent and the average two-year fix at 5.14 per cent. At the start of the year, both rates were closer to 5.5
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