LONDON (AP) — The Bank of England cut its main interest rate by a quarter of a percentage point to 4.25% amid concerns over the potential shock to global growth emanating from the tariff policies of the Trump administration.
The decision Thursday was widely expected, though there was an array of opinion on the nine-member Monetary Policy Committee, with two voting for a bigger half-point cut to 4%, and two voting to hold rates.
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Bank of England Governor Andrew Bailey gestures, during the Monetary Policy Report press conference in London, Thursday, May 8, 2025. (Carlos Jasso/Pool Photo via AP)
Bank of England Governor Andrew Bailey speaks, during the Monetary Policy Report press conference in London, Thursday, May 8, 2025. (Carlos Jasso/Pool Photo via AP)
Bank of England Governor Andrew Bailey speaks, during the Monetary Policy Report press conference in London, Thursday, May 8, 2025. (Carlos Jasso/Pool Photo via AP)
Bank of England Governor Andrew Bailey speaks, during the Monetary Policy Report press conference in London, Thursday, May 8, 2025. (Carlos Jasso/Pool Photo via AP)
Bank Gov. Andrew Bailey said inflationary pressures have continued to ease, paving the way for the fourth quarter-point rate cut since August.
“The past few weeks have shown how unpredictable the global economy can be,” he said. "That’s why we need to stick to a gradual and careful approach to further rate cuts.”
The decision is the first since U.S. President Donald Trump made his tariff announcement in early April. Though most tariffs were paused for 90 days following the ensuing market turmoil, including the 10% baseline tariff applied to U.K. goods entering the U.S., the backdrop for the global economy remains highly uncertain, particularly if the U.S.-China trade war persists.
Some of that uncertainty, with regard to the British economy, lifted Thursday when both Trump and British Prime Minister Keir Starmer separately outlined details of a trade deal between the U.S. and the U.K. Though Trump kept the 10% baseline tariffs on U.K., he agreed to reduce the levies on British autos, steel and aluminum.
Ahead of the announcement, Bailey welcomed the prospect of a deal while cautioning that as a “very open economy,” with global connections, the British economy would still be affected by tariffs applied to other economies.
“I say that because I hope the UK agreement, if it is the case this afternoon, will be the first of many," he said. “This will be good news all around, including the U.K. economy.”
The rate cut comes despite expectations that inflation will rise further above the bank's 2% target over coming months, from the current 2.6% as a result of a raft of price increases in April, such as domestic energy and water bills, and firms passing on tax rises to consumers.
“While headline inflation is expected to rise in the near-term, we do not expect that to persist,” said Bailey, adding that it will be back around target in two years time.
Unlike the Bank of England, and the European Central Bank, which last month cut interest rates too, the U.S. Federal Reserve kept rates unchanged Wednesday as its policymakers wait to see how Trump’s tariffs affect the U.S. economy before making any moves.
Most economists think the Bank of England will continue to lower borrowing rates over the coming months, though admitted that the three-way split in the voting may complicate its messaging.
“We still think the Bank will cut rates at least twice more later this year, but much like the Fed’s message yesterday, U.K. policy makers will want to see more data on how tariffs and domestic tax increases are being digested by the economy before moving decisively” said Luke Bartholomew, deputy chief economist at asset management firm Aberdeen.
Bank of England Governor Andrew Bailey gestures, during the Monetary Policy Report press conference in London, Thursday, May 8, 2025. (Carlos Jasso/Pool Photo via AP)
Bank of England Governor Andrew Bailey speaks, during the Monetary Policy Report press conference in London, Thursday, May 8, 2025. (Carlos Jasso/Pool Photo via AP)
Bank of England Governor Andrew Bailey speaks, during the Monetary Policy Report press conference in London, Thursday, May 8, 2025. (Carlos Jasso/Pool Photo via AP)
Bank of England Governor Andrew Bailey speaks, during the Monetary Policy Report press conference in London, Thursday, May 8, 2025. (Carlos Jasso/Pool Photo via AP)
HONG KONG (AP) — A Hong Kong court began hearing arguments Monday about the sentencing of democracy advocate and onetime-media magnate Jimmy Lai and his co-defendants, whose convictions under a national security law could land them in prison for life.
Lai, 78, is the founder of the now-defunct Apple Daily newspaper and an outspoken critic of China’s ruling Communist Party. He was arrested in 2020 under the law imposed by Beijing following massive anti-government protests that rocked Hong Kong the year before.
In December, he was found guilty of conspiring with others to collude with foreign forces and conspiracy to publish seditious articles.
His conviction raised concerns about the curtailing of press freedom in the former British colony, which returned to Chinese rule in 1997.
His case could also be a test for Beijing's diplomatic ties. The verdict drew criticism from foreign governments, including the U.S. and Britain. After the verdict, U.S. President Donald Trump, who had raised Lai’s case with China, said he felt “so badly.”
Lai, alongside other co-defendants involved in the case, appeared in court for the four-day mitigation hearings. The maximum penalty for their convictions is life imprisonment. Sentencing will come later.
The court Monday morning heard arguments concerning two activists’ sentences. Lawyers representing them suggested the starting points of their clients’ sentences should be 10 years and 10 to 15 years respectively, but they should receive reductions in part due to their assistance in the case.
Lai’s lawyer Robert Pang will deliver his arguments in the afternoon.
When Lai entered the courtroom, he pressed his palms together, an apparent gesture to express gratitude, and smiled at those sitting in the gallery. The media tycoon appeared to be in good spirits and greeted a convicted Apple Daily editor who was also sitting in the dock.
In August, his lawyers told the court that he suffered from heart palpitations. Hong Kong’s government said no abnormalities were found in a subsequent medical exam.
Prosecutor Anthony Chau said Lai’s health was stable. Chau said Lai had lost just 0.8 kg (about 1.8 pounds) over five years of detention, weighing 79.2 kg (about 175 pounds) when it was last measured this month. Lai is still considered obese as an Asian adult, Chau said. The obesity comment drew chuckling from some members sitting in the public gallery, and Lai also smiled in the dock.
Before sunrise, dozens of people had already lined up outside the court building to secure a seat in the public gallery. Retiree Simon Ng, a former Apple Daily reader, said he arrived and waited in line since Friday morning, hoping to see Lai.
“I want to let him know that he’s not alone," Ng said. “Many people support him."
Lai was convicted of two counts of conspiracy to commit collusion with foreign forces to endanger national security, in addition to one count of conspiracy to distribute seditious publications. Lai pleaded not guilty to all charges.
A conviction on the collusion charge under the security law results in a sentence ranging from three years in jail to life, depending on the offense’s nature and his role in it. The sedition charge under a separate, colonial-era law carries a maximum of two years’ imprisonment.
Three government-vetted judges wrote in their December verdict that Lai spearheaded the conspiracies and took issue with what they called his “constant invitation” to the United States to bring down the Chinese government with the excuse of helping Hong Kongers.
Lai’s lawyers admitted during the trial that he had called for foreign sanctions before the national security law took effect, but insisted he dropped these calls to comply with the law. They also argued on freedom of expression grounds.
But the judges said that Lai had never wavered in his intention to destabilize the ruling Chinese Communist Party. After the enactment of the law, he intended to continue, though less explicitly, they said. They emphasized that Lai was not on trial for his political views.
Beijing has opposed what it called the smearing of Hong Kong's judiciary “by certain countries,” saying the judicial authorities perform duties according to the law.
Six ex-Apple Daily senior executives and two activists involved in Lai's case had entered guilty pleas, admitting that they had conspired with Lai and others to request foreign forces to impose sanctions, blockades or engage in other hostile activities.
The executives were publisher Cheung Kim-hung, associate publisher Chan Pui-man, editor-in-chief Ryan Law, executive editor-in-chief Lam Man-chung and editorial writers Fung Wai-kong and Yeung Ching-kee. Some of them, alongside the two activists Andy Li and Chan Tsz-wah, served as prosecution witnesses during the 156-day trial.
A guilty plea usually can lead to a sentence reduction. Under the security law, a reduced penalty may be granted to those who report on the offense committed by others.
Chan Pui man's husband, Chung Pui-kuen, a former top editor of Stand News who had been sentenced to 21 months in jail in a separate sedition case, was among those sitting in the public gallery.
After the verdict, Lai's daughter, Claire, said Lai would devote himself to God and his family rather than political activism if he were released.
Trump said after the verdict that he spoke to Chinese President Xi Jinping about Lai and “asked to consider his release." British Prime Minister Keir Starmer has said his government has made it a priority to secure the release of Lai, a British citizen.
People line up behind the barricades to attend the hearing about the upcoming sentence for pro-democracy media mogul Jimmy Lai, outside the West Kowloon Magistrates' Courts, in Hong Kong, Monday, Jan. 12, 2026. (AP Photo/May James)
Correctional Services Department vehicles arrive at the West Kowloon Magistrates' Courts, ahead of a hearing to hear arguments about the sentencing of democracy advocate and onetime media magnate Jimmy Lai, in Hong Kong, Monday, Jan. 12, 2026. (AP Photo/May James)
Members of foreign councils arrive at the West Kowloon Magistrates' Courts to attend a hearing to hear arguments about the sentencing of pro-democracy media mogul Jimmy Lai, in Hong Kong, Monday, Jan. 12, 2026. (AP Photo/May James)
Robert Pang, center, lawyer for pro-democracy media mogul Jimmy Lai arrives to the West Kowloon Magistrates' Courts, ahead of a hearing to hear arguments about the sentencing of Lai, in Hong Kong, Monday, Jan. 12, 2026. (AP Photo/May James)
Teresa Lai, wife of pro-democracy media mogul Jimmy Lai arrives to the West Kowloon Magistrates' Courts to attend a hearing to hear arguments about the sentencing of Jimmy Lai, in Hong Kong, Monday, Jan. 12, 2026. (AP Photo/May James)
FILE- Hong Kong media tycoon Jimmy Lai is escorted by Correctional Services officers to get on a prison van before appearing in a court in Hong Kong, Dec. 12, 2020. (AP Photo/Kin Cheung, File)
