Bank of England cuts interest rates to 4.25%

(Sharecast News) - The Bank of England lowered interest rates to 4.25% on Thursday, as widely expected, its second cut so far this year. In a tight vote, the Monetary Policy Committee agreed by a majority of 5 to 4 in reduce the cost of borrowing by a quarter point.

Two members argued for a larger cut, of 50 basis points, while two wanted to leave rates at 4.5%

It is the fourth cut in the current cycle, after rates were hiked in response to soaring inflation.

It is also the BoE's first interest rate decision since US president Donald Trump unveiled his sweeping tariff regime on 2 April.

Trump's erratic imposition of often swingeing tariffs worldwide has upended markets and prompted fears of heightened inflation and weaker global growth. Business and consumer confidence has fallen sharply.

As a result, some economists were hoping the central bank could yet go further and cut rates by 50 basis points.

Last month, Trump - who wants lower US interest rates - called Federal Reserve chair Jerome Powell a "major loser". However, on Wednesday the Fed held steady, leaving the cost of borrowing unchanged on concerns that the tariff regime will cause higher unemployment and inflation.