US tariffs to prompt Bank of England to cut rates at faster pace — Bloomberg

Bloomberg says the Bank of England is set to lower interest rates at its May 8 meeting. Additionally, the regulator could start the cycle of consecutive cuts in borrowing costs as it responds to global trade tensions stemming from US tariff policies.

Economists polled by the news agency believe the UK’s central bank will switch to monetary easing, as Donald Trump’s duties will weigh on GDP growth and temper inflation in the country. 

Most respondents expect the Bank of England to lower rates to 4.25% from 4.5% on Thursday. Nomura economists think some Monetary Policy Committee (MPC) members may vote to reduce borrowing costs by 50 basis points. 

Barclays believes the MPC is likely to tee up another quarter point cut for June. This would be the first back-to-back rate reduction since 2009. 

Markets are pricing in four more 0.25% cuts during the remaining six meetings this year. The rates are forecast to eventually reach 3.5%, Bloomberg reports.