The Bank of England has cut interest rates to 4.25 per cent in a split decision dividing hawks and doves.

The Bank’s policymakers suggested that President Trump’s aggressive tariffs on China were “more likely to be disinflationary than inflationary”, with price growth expected to level off to its two per cent target by the end of 2026.

But members on the Monetary Policy Committee (MPC) did not come to a unanimous agreement on cutting interest rates by 25 basis points, as two external members – Swati Dhingra and Alan Taylor – voted for interest rates to be cut by 50 bps to four per cent.

Chief economist Huw Pill and Catherine Mann, who previously supported a bigger cut than other members in a decision earlier this year, voted for interest rates to be held at 4.5 per cent.

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