Bank of England governor Andrew Bailey has hailed the news that Britain and the United States are expected to announce a trade agreement in a couple of hours,He tells journalists at today’s press conference that the Bank has been following the issue very closely,Bailey says he hasn’t been briefed about the situation, and doesn’t know the content of the deal,But he says:We do now have news that suggests there will be an announcement, and we welcome that news,I very much welcome it, and I think it’s very well done to those involved.

Bailey explains that the deal will help to reduce uncertainty within the economy.But, he cautions, as the UK is a very open economy, so will be affected by the way tariffs affect other economies.Bailey says:I hope that the UK agreement, if it is indeed announced this afternoon, will be the first of many.That will be good news all around, including for the UK economy.It is “excellent that the UK is leading the way”, he concludes, repeating his congratulation to those involved on both sides.

Reminder: Donald Trump has already announced a trade deal between the UK and the US, saying the agreement is a “full and comprehensive one”.Time to recap:Bank of England policymakers have cut interest rates by a quarter point to 4.25% to cushion the UK economy against the impact of Donald Trump’s trade war.The widely expected move from the Bank’s monetary policy committee (MPC), its fourth cut since last August, also carried a warning that the UK economy would slow by a further 0.3% over the next three years in addition to dramatic cuts to its forecasts made earlier this year.

In a blow to the chancellor, Rachel Reeves, the MPC said a combination of uncertainty surrounding the impact of US trade policy and clouds hanging over the UK economy meant growth would be almost stagnant for the rest of the year.Economic growth “is judged to have slowed and is expected to remain subdued in the near term”, the Bank said.In a split vote, with two of the nine-member MPC voting for a bigger 0.5 percentage point cut and two voting to hold at the current 4.5% level, the Bank signalled a high degree of caution about the number of interest rate cuts over the rest of the year.

Thursday’s interest rate cut to 4.25% is the fourth in a run of reductions that kicked off last August.It represents a fillip for Rachel Reeves, who will hope it helps revive the feelgood factor for gloomy British consumers.The Bank of England’s nine-member monetary policy committee (MPC) has passed judgment on the impact of Donald Trump’s trade war for the UK – and expects modestly weaker growth and inflation to be the result.Lower global energy prices as markets anticipate weaker demand, and cheaper Chinese imports, are likely to bear down on costs, the MPC has judged.

And the trade war is likely to shave 0.3% off (already weak) growth in three years’ time, reassuring them that they have a little more space to cut rates.The traditional Friday night post-work drink has all but disappeared from UK city centres since the pandemic as a result of hybrid working, a House of Lords committee has heard.“In London’s instance, the Friday night drink hasn’t gone away, it has just shifted to a Thursday,” Paul Swinney, director of policy and research at thinktank Centre for Cities, told the Lords’ home-based working committee.“When we looked at other large cities … it appeared from the data that we have, that the post-work drink has reduced.

”Swinney cited recent Centre for Cities research that found increased home working had changed the spending habits of the nation’s commuters significantly, which could pose a challenge for service businesses that depend on footfall from office workers, such as hospitality venues, sandwich bars and coffee shops.“In London it’s seems like it’s potentially a reallocation during the working week, but in other large cities hybrid working seems to have led to a reduction of weekday spending by workers in the city centre.”However, Centre for Cities’ research has found that workers outside of the capital – in cities including Birmingham, Manchester, Nottingham and Liverpool – are more likely to travel into their nearest city centre during their leisure time at the weekend.The Lords’ committee has launched an inquiry into the impact of the post-Covid increase in remote and hybrid working on employers and their employees, and the wider impact on the British economy.Hybrid working – splitting time between the office and home or another remote location - was the standard pattern for more than a quarter (28%) of working adults in Great Britain in late 2024, according to the Office for National Statistics (ONS).

While some large employers have toughened up their office attendance policies in recent months, many workers tend to visit their workplace on the core midweek days of Tuesday, Wednesday and Thursday, and may bookend the week at home,“Commuting trips are lower Mondays and Fridays especially,” Christina Calderato, director of strategy at Transport for London (TfL), told the committee while Thursday is the busiest day of the week on the London underground,Tube and bus usage is at about 90% of pre-pandemic levels, Calderato said, with bus usage more consistent across the week,She added:“I think that speaks to the fact that people who are reliant on the bus are less able to change some of their patterns of trips than other workers,”Friday is also the quietest day of the week on Manchester’s tram network, according to Daniel Vaughan, chief network officer at Transport for Greater Manchester, although more people travel for leisure reasons on Friday evenings.

The reduction in commuting since the pandemic and the ability of some workers to spend part of the week at home has not necessarily benefitted local businesses in smaller towns and cities in the way many had predicted.“There hasn’t been this equivalent big bounce in local spending to match the decline in the share of spending that’s going into the city centre,” Swinney told the committee.“From our data, it looked like suburban supermarkets had probably been the biggest winner in the shift in the share of spending happening within city centres.”UK farmers have concerns about the US trade deal.NFU President Tom Bradshaw has said:“For several years, we’ve campaigned with the UK’s agricultural attachés in Washington for market access for British beef, a product globally respected for its quality and strong environmental credentials.

These efforts have contributed to enabling the UK government to secure ring-fenced access for British beef exports to the US.However, the inclusion of a significant volume of bioethanol in the deal raises concerns for British arable farmers.We’ll be engaging closely with our members to help them understand and prepare for the potential impact.Our biggest concern is that two agricultural sectors have been singled out to shoulder the heavy burden of the removal of tariffs for other industries in the economy.While we understand this, we also know that today is the start, not the end, of a process and UK agriculture cannot continue to shoulder such imbalances in future negotiations.

”The US-UK trade deal has not brought much cheer to the City of London today,The FTSE 100 index of blue-chip shares has closed 27 points lower at 8531 points, down 0,3% today,That’s its second daily fall in a row, after an unprecedented 16 daily consecutive rises,Bond prices have also fallen, lifting the yield (or interest rate) on UK government bonds.

Two-year bond yields are up by 11 basis points, or 0,11 percentage points, while 30-year bond yields are up 6bps,That reflects City traders reassessing the chances of UK interest rates in the months ahead, following today’s split at the Bank of England,Hmmm… Donald Trump later seems to suggest that the tariff paid by Rolls-Royce will be cut from 25% to 10%, rather than abolished completely as suggested earlier,But he also talks about Rolls-Royce “cars” – which are actually made by BMW (at RR’s factory in Goodwood)(The Rolls-Royce company listed on the stock market makes jet engines, and modular nuclear power stations).

Rival luxury car maker Aston Martin’s share price are up 12%.Keir Starmer is at a Jaguar Land Rover factory.Summing up the deal, he says:This is a deal that will protect British businesses and save thousands of jobs In Britain, really important, skilled, well paid jobs.It will remove tariffs on British steel and aluminium, reducing them to zero.It will provide vital assurances for our life sciences sector, so important to our economy, and grant unprecedented market access for British farmers without compromising our high standards.

And he says the deal means US tariffs on cars from the UK will be cut from 27.5% to 10% for 100,000 vehicles every year.More here:US President Trump’s 10% tariff rate on UK imports appears to be maintained, despite today’s deal.Lutnick says “We started at 10%, and we ended at 10%”, as he outlines the deal.He also points to a chart showing how UK tariffs on the US will drop from 5.

1% to 1.8%, while US tariffs on UK goods have gone up from 3.4% to 10%.Errrm.The deal is: US trebles tariffs on the UK, and in return the UK cuts tariffs by two-thirds…This from Lutnick’s chart in the White House… pic.

twitter.com/pT38LaRisgLutnick chart says that the USA gets $6bn in extra tariff revenue from the UK and gets $5bn more in export markets in the UK pic.twitter.com/fN4Vahwx1KUK jet engine-maker Rolls-Royce appears to benefit from the US trade deal.US commerce secretary Howard Lutnick has told reporters in the White House that Rolls-Royce engines, and plane parts, will come over tariff-free to the US.

Shares in Rolls-Royce are rising, now up 4% today.Lutnick also says the UK have “opened up new market access, ethanol, beef, machinery, all the agricultural products” as part of today’s deal.Lutnick also reveals that the UK will announce later today it will buy $10bn worth of Boeing planes, but resists revealing which airline is involved.Boeing’s shares have also moved higher, and are up almost 3% today.A little later than expected, Donald Trump is announcing details of a trade deaal with the UK.

Sat in the Oval Office, the US president calls it a breakthrough deal that gives the US more access to the UK.Back in the UK, prime minister Keir Starmer is dialled in by phone, and explains that the agreement will boost trade and create jobs.Trump explains the UK will reduce non-tariff barriers, and will also fast track US goods though customs.He also says there are plans to bring the United Kingdom into the economic security alignment with the United States.Trump says:“That’s the first of its kind.

So we have a big economic security blanket and that’s very important and we feel very, very comfortable with that, because it’s been a great ally,” Trump said,He went on to add:“Both countries have agreed that the economic security is national security, and we’ll be working together as allies to ensure that we have a strong industrial base, appropriate export controls and protections for key technologies and industries like steel,”Our Politics Live blog has all the details:Steve Ryder, senior portfolio manager at Aviva Investors, reckon there’s now less chance that that Bank of England will announce an interest rate cut at its next meeting, in late June,Ryder explains:“As was widely expected today the BOE reduced interest rates by 0,25% and lowered their growth and inflation projections, with inflation now forecast to undershoot their target over the next two years.

We expected a cautious commitment to further easing due to the uncertainty around the NIC impact.Instead, the statement was undeniably more hawkish with the main surprise being the vote split with two members calling for unchanged rates, and one calling for a 0.50% cut.Over in Wall Street, the main share indices have opened higher as Donald Trump’s promise of a trade deal today cheers investors.The Dow Jones industrial average has risen by 248 points, or 0.

6%, in early trading to 41,362.The S&P 500 index is up 35 points, or 0.6%, to 5,667 points and the tech-focused Nasdaq has gained 0.9%.Shares in chipmakers are rallying, after the Trump administration confirmed it plans to rescind and modify a Biden-era rule that curbed the export of sophisticated artificial-intelligence chips.

Nvidia are up 0,3%, while Intel have jumped 2,7%,The pound has risen against the US dollar since the Bank of England’s interest rate cut was announced,Traders are surprised that two policymakers opposed today’s rate cut – details here – which may be a sign that the Bank might not cut borrowing costs as much as expected this year.

Before noon, the City had expected four rate cuts this year,Now, only two more are fully priced in – on top of the one just announced,Sterling is up a third of a cent, at $1,3333,Matthew Ryan, head of market strategy at global financial services firm Ebury, says:“The Bank of England appears thoroughly divided over the path ahead for UK rates, with committee members appearing at odds as to how best to tackle the acute uncertainty created by President Trump’s tariffs.

In an attempt to counteract the growth risks posed by the tariffs, and in acknowledgement of progress on disinflation, the majority of the MPC voted for a 25 basis point cut, with two of the doves even favouring a 50bp move.“Yet, surprisingly, two of the hawks were in favour of no change, with the bank suggesting that the impact of the tariffs on UK growth and inflation would probably be minimal.The MPC also reiterated the line that additional cuts would be both “gradual and careful”, a stance intended to temper expectations for aggressive easing in the coming months.“The pound has received a modest leg up following the announcement, as markets dial back bets in favour of lower UK rates.We think that a pause is almost guaranteed at the bank’s next meeting in June, with no more than two further cuts likely to follow during the rest of the year