Bank of England Reduces Interest Rates Amid Global Uncertainty

The Bank of England announced a cut in its main interest rate to 4.25% on Thursday, despite a three-way split among policymakers. This move comes as U.S. tariffs under President Donald Trump's administration exert pressure on global economic growth, adding to the uncertainties for central banks.

Speaking at a press conference, Governor Andrew Bailey stressed that the global economy remains uncertain. He noted that interest rates are not on auto-pilot, highlighting the need for the Monetary Policy Committee (MPC) to respond thoughtfully to changing economic conditions and inflation projections in the UK.

Governor Bailey further addressed the issue of disinflation, indicating that domestic price and wage pressures are waning. Despite an anticipated rise in headline inflation in the short term, Bailey assured that this rise is expected to be temporary and the goal remains to achieve a sustainable 2% inflation target over the medium term.

(With inputs from agencies.)