Global Markets React to Interest Rate Cuts and Trade Deals

The Bank of England cut its key interest rate from 4.5% to 4.25% amid lackluster economic growth and uncertainty around President Donald Trump's trade tariffs. The move is expected to bring relief to borrowers, businesses, and consumers. While savers will lose out, homeowners with tracker mortgages and businesses will benefit from cheaper borrowing. The rate cut is seen as a positive step for the housing market and consumer confidence, but uncertainty around US trade tariffs and inflation may dampen the effect.

European markets are expected to open higher on Thursday as investors await earnings reports from major companies and interest rate decisions from central banks in the region. The U.K.'s FTSE 100, Germany's DAX, France's CAC, and Italy's FTSE MIB are all projected to rise. Siemens Energy upgraded its full-year guidance after posting a better-than-expected quarterly revenue jump, but warned of a potential multimillion-dollar profit hit from tariffs. The U.S. Federal Reserve held interest rates steady, citing rising inflation and unemployment risks. Meanwhile, the U.K. is reportedly set to become the first country to sign a trade deal with the U.S.

President Donald Trump announced that he will unveil a 'major trade deal' with the United Kingdom on Thursday. The deal is expected to bring relief from historically high tariffs that have threatened the US and global economies. Trump's top trade adviser, Peter Navarro, suggested that the UK may be the first country to sign a trade agreement with the US. The deal may exempt the US from the UK's 2% digital services tax and reduce or exempt the UK from 25% tariffs on aluminum, steel, and autos. However, experts doubt that the deal will be a comprehensive trade agreement, and it may instead be a memorandum of understanding. The US is also holding trade talks with China, and Treasury Secretary Scott Bessent will meet with Chinese counterparts in Geneva.