Bank of England may cut interest rates by 0.25% amid tariff tensions

The Bank of England is expected to lower its key interest rate by a quarter percentage point on Thursday, bringing it down to 4.25%, amid fears of US President Donald Trump’s planned tariffs hitting global economic growth, including Britain’s.The decision is due at 11:02 GMT, two minutes later than usual to honour a moment of silence for the 80th anniversary of Victory in Europe Day. The US Federal Reserve, on Wednesday, opted to hold borrowing costs steady, while the European Central Bank cut rates last month to stimulate the eurozone economy.Markets are already anticipating the rate cut, however, will be closely looking out for any changes in the language used by the central bank’s monetary policy committee, which could indicate further rate reductions later in the year.Enrique Diaz-Alvarez, chief economist at global financial services group Ebury, said, “While the Bank of England is universally expected to cut (on Thursday)... the key to the reaction in the pound will be the bank's accompanying communications.” He also said the bank would likely lower its forecasts for both inflation and economic growth in 2025, and may warn that US tariffs could slow down the UK economy and reduce inflation.Britain is currently bracing for 10% tariffs on most of its goods exported to the US, its second-largest trading partner after the EU. The new levies are part of a broader wave of trade tensions that have already pushed oil prices down, further easing inflation expectations.BoE governor Andrew Bailey has warned that the tariffs could still be a blow to the UK economy even if Britain escapes the harshest duties. London is engaged in talks with Washington over a post-Brexit trade deal that could see tariffs softened in exchange for adjustments to the UK's digital services tax on US tech giants.The Bank of England last altered interest rates in March, when it held steady at 4.5% after three cuts in the previous seven months, as the UK economy continued to wrestle with a weak growth