BoE Set to Cut Rates as Global Policy Paths Diverge

The Bank of England (BoE) is expected to lower its base rate by 25 basis points to 4.00% at its 7 August Monetary Policy Committee (MPC) meeting, which will be the third cut of 2025.

The move signals a clear shift from restrictive to more accommodative policy as economic pressures mount.

UK outlook:

• Inflation remains stubbornly high at 3.6% (June CPI) vs the 2% target.
• Core inflation led by energy, food, and services is proving persistent.
• Labour market data shows slowing job creation, rising redundancies, and falling consumer confidence.
• MPC split: Swati Dhingra favours a larger 50bp cut for stronger stimulus; Catherine Mann warns of inflation risks, .

The BoE’s gradual easing reflects concerns over stagnating growth and deteriorating business sentiment, suggesting policy support may need to extend beyond interest rate adjustments.

US outlook:

• The Federal Reserve held its benchmark rate at 4.25%–4.50% on 30 July.
• Chair Jerome Powell stressed a data‑dependent approach amid new inflation risks from tariffs.
• The latest U.S. tariff package targets imports from China, the EU, and emerging markets, raising costs for electronics, machinery, and raw materials.

Global implications:

The UK’s monetary easing, the Fed’s cautious hold, and rising trade tensions create a complex environment for policymakers and markets. Traditional monetary tools may be insufficient in tackling the intertwined challenges of inflation, growth, and geopolitical instability requiring strategic foresight, policy agility, and international cooperation.

Navigating the complexities of finance and international trade requires timely insights and expert guidance. Metro continuously monitors market influences — from interest rate movements and currency fluctuations to macroeconomic trends and evolving regulations — to help you de‑risk your supply chain and maximise opportunities.

Make informed decisions with Metro’s strategic support. Email Laurence Burford, Chief Financial Officer, for trade insights and risk management advice.