Sluggish UK growth to prompt further rate cuts by central bank — Reuters poll

A Reuters poll suggests that the UK economy will expand by just 1% this year, with weak growth prospects likely pushing the Bank of England (BoE) to cut interest rates twice more before December. So far, uncertainty surrounding potential US tariffs has had minimal impact on analytical forecasts.

The survey was conducted ahead of UK Finance Minister Rachel Reeves' June 11 Government Spending Review, which is expected to outline increased public expenditure in healthcare and defense.

UK GDP expanded by 0.7% in the first quarter of 2025, but growth is projected to slow sharply to 0.1% in the current three months before rebounding to 0.3% in the fourth quarter.

James Smith from ING noted that UK economic forecasts for 2025 remain largely unchanged, as Trump's proposed tariffs are about to have a limited overall impact. However, specific sectors, such as automotive, steel, and pharmaceuticals, could face export challenges.