The Bank of England (BOE) has cut interest rates from 4.5% to 4.25%, marking its fourth cut in a year and hinting that more cuts may be announced soon.
Governor Andrew Bailey said the rate cut would continue to be gradual, as the UK braces for the impact of the global trade war and looks for new deals with the US and India.
He also said the central bank was also considering a bigger cut to 4% amid concerns that the global trade war could hurt UK economic growth.
Bailey, who welcomed the new UK-US tariff deal as a positive sign for the recovery in global trade, said the world may need a little shock as a reminder of how important trade is.
Although inflation is expected to temporarily jump to 3.5%, the central bank believes falling energy prices will ease price pressures just as US companies start stockpiling UK goods ahead of Trump's upcoming tariffs.
