Latest news with #DharshiniDavid
BBC News
5 days ago
- Business
- BBC News
Bank of England expected to cut interest rates as latest decision due
Update: Date: 10:09 BST Title: It's likely to be a close call Content: Dharshini DavidDeputy economics editor With growing evidence that the economy has been under pressure, the Bank of England is expected to bring relief for millions of borrowers. However, the decision is likely to be close. The Bank's job to get inflation down to its 2% target and keep it there - at a time when inflation looks likely to remain above that level for some time - has had to be considered amid concerns about a deteriorating jobs market. Many businesses – from hospitality to construction - claim to be struggling because of higher taxes and minimum wage rates. The Bank's own survey suggests that rethinking employment plans or reducing pay rises are among the responses such firms are using. Figures next week are also expected to show that the economy barely expanded between April and June, the second quarter of the year. The uncertainty over the shape of US President Donald Trump's trade policy has at least been reduced. But as the panel weighs up competing risks, economists warn that after today the next rate cut may not follow for many months – and it remains unclear how low rates may fall. Update: Date: 10:01 BST Title: What are interest rates? Content: Michael RaceBusiness and economics reporter Put simply, interest is the extra amount you get charged when you borrow money. Say someone lends you £10 at a 10% interest rate, you'll pay them back £11 - the £10 you borrowed, plus an extra £1 in interest (10% of £10). The Bank of England's base interest rate, which is being set today, dictates what rates most high street banks and lenders set for things - ranging from mortgages to credit cards and savings accounts. When the Bank puts up its rate, it gets more expensive to borrow money, but it also means that returns on savings accounts, which accrue interest, go up. When rates drop, as they are expected to today, borrowing becomes cheaper and saving rates typically go down. The Bank of England's job is to keep inflation, which is the rate prices rise at for goods and services, at an annual rate of 2%. It uses interest rates to try to keep it at that level. When rates rise, people tend to spend less and save more. That slows the demand for goods and services, which can limit price rises and thus cool inflation. Update: Date: 09:59 BST Title: Bank of England expected to cut interest rates Content: The Bank of England is expected to announce a cut in interest rates at midday. Interest rates dictate what most high street banks and lenders charge for borrowing money - ranging from credit cards to mortgages. Markets predict the Bank will reduce interest rates to 4% from 4.25% in its fifth cut since last August, and if rates drop it will be the third time they have done so this year. A lower base rate can reduce monthly mortgage costs for some homeowners but it also means a smaller return for savers. We're expecting the announcement at 12:00 BST, and we have writers in the newsroom and at the Bank of England poised to bring you the latest updates and analysis. Stick with us.
BBC News
30-04-2025
- Business
- BBC News
US economy shrinks 0.3%, companies race to get ahead of Trump tariffs
A worse outcome for growth than economists expected Dharshini David Deputy economics editor Not 24 hours after the White House Press Secretary claimed that the American economy was going great guns, there's dramatic proof that it wasn't – even ahead of so-called Liberation Day. This is a worse outcome for growth than economists expected. Some of the first quarter's weakness was due to a surge in imports, as retailers stockpiled ahead of tariffs coming in – and that counts as depressing GDP growth. But, with consumer spending weak, there are clear signs that the damage to growth may be sustained. Influential economists had previously warned that the risk of the US economy falling into recession this year was close to 50%. Many will be hastily readjusting those expectations, fearing that the pain for households and businesses has come sooner and will be more acute. And don't forget, Americans account for $1 in $6 of global consumer spending – if they're not buying, it's harder for other countries to sell. We're not immune to their pain
