The value of the pound dropped sharply after the Bank of England announced a cut to interest rates in a new blow for Chancellor Rachel Reeves.

Britain's central bank cut its main interest rate in response to a troubling mix of stuttering growth, stubborn inflation and President Trump’s tariff threats. Sterling lost about 0.5% against the dollar,

The Bank of England cut rates to 4.5% amid easing inflation but flagged lingering risks. GDP growth remains weak, and potential US tariffs add uncertainty. The pound fell, while the FTSE 100 hit record highs.