LONDON (AP) — The Bank of England on Thursday cut its key interest rate for the first time in four months as stubbornly high inflation that has plagued British consumers and businesses starts to ease.
The central bank's policymakers voted 5-4 to reduce the base rate by a quarter of a percentage point to 3.75% on Thursday, the lowest since February 2023.
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The Bank of England is reflected on a wet pavement in London, as the Monetary Policy Committee (MPC) will publish their decision on interest rates, Thursday, Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth)
Pedestrians pass the Bank of England in London, as the Monetary Policy Committee (MPC) will publish their decision on interest rates, Thursday, Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth)
Pedestrians pass the Bank of England in London, as the Monetary Policy Committee (MPC) will publish their decision on interest rates, Thursday, Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth)
Pedestrians pass the Bank of England in London, as the Monetary Policy Committee (MPC) will publish their decision on interest rates, Thursday, Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth)
Pedestrians pass the Bank of England in London, a the Monetary Policy Committee (MPC) will publish their decision on interest rates, Thursday, Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth)
The move came a day after the Office for National Statistics reported that consumer price inflation slowed to 3.2% in the 12 months through November, from 3.6% a month earlier.
The figure was below the Bank of England’s forecast of 3.4%. That gave policymakers room to cut interest rates in an effort to bolster Britain’s stagnant economy. Statistics released earlier this week showed a weakening jobs market, with the number of job vacancies declining and the unemployment rate rising to 5.1%, the highest since January 2021.
“Unemployment, underemployment and flows from employment to unemployment have all risen,” Bank of England Gov. Andrew Bailey said in a statement. “While I do not yet see conclusive evidence of a sharper downturn in the labor market, we should be vigilant.”
Even so, the bank’s Monetary Policy Committee was divided on whether to cut interest rates, with four members remaining focused on the fight against inflation, which is still well above the Bank of England’s 2% target.
British consumer prices are also rising faster than in other parts of Europe and North America. The inflation rate in the 20 European countries that use the euro currency remained at 2.1% in November. The U.S. inflation rate was 3.0% in September, the latest figures released because of the government shutdown.
Lower interest rates help spur economic growth by reducing borrowing costs, which can lead to increased spending by consumers and boost investment by businesses. But that can also fuel higher prices.
Central bankers have to weigh those competing forces, trying to prevent inflation from eroding the value of earnings and savings without putting an unnecessary brake on economic growth.
The Bank of England is reflected on a wet pavement in London, as the Monetary Policy Committee (MPC) will publish their decision on interest rates, Thursday, Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth)
Pedestrians pass the Bank of England in London, as the Monetary Policy Committee (MPC) will publish their decision on interest rates, Thursday, Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth)
Pedestrians pass the Bank of England in London, as the Monetary Policy Committee (MPC) will publish their decision on interest rates, Thursday, Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth)
Pedestrians pass the Bank of England in London, as the Monetary Policy Committee (MPC) will publish their decision on interest rates, Thursday, Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth)
Pedestrians pass the Bank of England in London, a the Monetary Policy Committee (MPC) will publish their decision on interest rates, Thursday, Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth)
NEW DELHI (AP) — India signed a comprehensive economic partnership agreement with Oman on Thursday as part of its broader strategy to offset the impact of steep U.S. import tariffs and widen export destinations during growing global trade uncertainties.
This is the second free trade agreement signed by New Delhi in the past six months, the first one being inked with the United Kingdom in May.
The India-Oman agreement was signed in Muscat in the presence of Indian Prime Minister Narendra Modi and Oman’s head of state, Sultan Haitham bin Tarik.
The deal aims to boost bilateral trade and push India’s exports of engineering goods, textiles, leather, pharmaceuticals and agricultural products. It will provide Indian goods zero-duty market access on 98.08% of Oman’s tariff lines, India's Trade Ministry said in a statement.
India has offered Oman tariff liberalization on 77.79% of its tariff lines, which will cover nearly 95% of New Delhi’s imports from Muscat, the ministry said.
In recent months, India has accelerated a push to finalize several free trade agreements, or FTAs. The country is in advanced talks with the European Union, New Zealand and Chile, among other countries.
FTAs are a central pillar of India’s economic strategy as it seeks deeper integration into global supply chains, stronger export growth and sustained job creation. By lowering tariffs and setting predictable trade rules, the pacts would help Indian businesses remain competitive and expand access to newer markets.
With global trade increasingly shaped by tariff disputes and geopolitical tensions, India is betting that a wider network of trade agreements will help cushion external shocks and anchor its export ambitions.
The stepped-up negotiations come as Indian exporters face pressure from higher U.S. import tariffs of 50%, which went into effect in August. While the two countries have been negotiating a bilateral trade agreement, the tariffs have weighed on sectors such as textiles, auto components, metals and labor-intensive manufacturing.
“India is clearly using FTAs as a strategic tool to diversify export markets and soften the impact of steep and uncertain U.S. tariffs,” trade analyst Ajay Srivastava said.
In all, India has 15 free trade agreements covering 26 countries and six preferential trade agreements, with another 26 nations while negotiating with more than 50 other partners, Srivastava said.
Once the ongoing talks conclude, India will have trade agreements with virtually all major global economies except China, he said.
India signed comprehensive economic cooperation and trade agreements with the United Arab Emirates and Australia in recent years, lifting bilateral trade with both countries. In May, Britain and India announced that they had agreed on a hard-wrought FTA that will slash tariffs on products including Scotch whisky and English gin shipped to India, and Indian food and spices sent to the U.K.
The recent agreements have reinforced the case for faster negotiations and clearer frameworks for business, officials said.
“India is negotiating several FTAs” at a time of challenges in global trade, Trade Secretary Rajesh Agarwal told reporters this week. “I see positive progress on several of these, next year.”
But challenges remain as Indian negotiators face pressure to protect small farmers and domestic industries, even as trading partners push for greater market access.
India and the U.S. hoped to have the first tranche of a bilateral trade agreement by the fall, but it hasn't come through, because ties have been strained following India’s unabated purchase of discounted Russian crude oil. Washington says the purchases help fund Moscow’s war machine in the ongoing invasion of Ukraine.
In recent weeks, there have been signs of tempers cooling. Modi applauded Trump’s peace plan to try to end the Russia-Ukraine war, and the two leaders recently spoke over the phone to discuss mutual interests, including trade.
A team of U.S. negotiators led by Deputy Trade Representative Rick Switzer visited New Delhi last week and held talks with Indian officials. Switzer discussed a India-U.S. economic and technological partnership as well as opportunities to boost two-way trade, India’s Foreign Ministry said in a statement.
New Zealand’s trade and investment minister, Todd McClay, met with Indian counterpart Piyush Goyal last week. They discussed key aspects of an FTA and explored ways to advance the negotiations for mutual benefits, Goyal said on X.
EU Trade and Economic Security Commissioner Maroš Šefčovič also met Goyal last week to review progress on the India-EU free trade agreement and explore ways to resolve issues and advance negotiations.
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