Last Thursday 8th May, The Bank of England (BoE) announced a further rate cut, bringing the current base rate to 4.25% - a move that was broadly expected, especially in light of Trump’s tariff policies which could cause a drag on UK growth and inflation. The latest meeting of the Monetary Policy Committee revealed a split, with members having voted three ways. Crucially, two members voted for a more dramatic 0.5% cut – which could indicate that rate cut momentum is building. As it stands, traders are currently pricing in two more cuts this year, which would imply a terminal base rate of 3.75% for 2025. Inflation forecasts were also lowered, with the BoE now expecting UK inflation to hit the 2% target in Q1 2027. 

This might be good news for mortgage borrowers but less so for savers who have been enjoying higher savings rates since rates peaked at 5.25% in August 2024. 

Also on Thursday, the UK and US unveiled a new trade framework which aims to eliminate or reduce tariffs on UK-made cars, steel, and aluminium entering the US market. The move sparked some cautious optimism in the financial sector, and it could be taken as a signal that international trade tensions may ease. However, there is no doubt that the election of President Trump has created a backdrop of uncertainty and volatility across the globe. America has for a long time been the key economic driving force in a globalised world, with a protectionist President at the helm, its role is changing - and countries will have to adapt.  

Decision-making can be difficult in these uncertain times, however those with a long-term plan should maintain focus. For those exploring investment opportunities in this shifting environment, TNB’s own team of dedicated Relationship Managers are here to answer any questions and walk you through the process. We offer a range of fixed deposits and also investment solutions that can suit your individual level of knowledge and interest. For those who prefer having their investments managed for them, we offer Discretionary Portfolios. If you’d like greater involvement, our Advisory Service may be better suited.