Trump tariffs kick in; Bank of England likely to cut rates – business live

Source: The Guardian | Original Published At: 2025-08-07 06:17:00 UTC

Key Points

• Bank of England expected to cut interest rates amid weak UK economy and inflation concerns
• Trump's new tariffs impact Switzerland, India, China, Philippines, and Japan
• Switzerland seeks FIFA chief's intervention to reduce US tariffs
• India condemns US tariffs over Russia oil purchases, vows to protect national interests
• China's exports surge ahead of tariff deadline, ASEAN trade expands
• Maersk raises 2025 outlook despite trade wars, citing resilient demand
• Toyota forecasts $9.5bn loss from US tariffs, revises profit outlook
• Trump claims tariffs will bring billions to US, challenges court opposition

From 2h ago 02.17 EDT Introduction: Bank of England interest rate decision today Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. With the UK economy looking weak, but inflation rumbling away, and a trade war raging, these are tricky times to be a central banker. And at noon today, the Bank of England will reveal whether its policymakers have decided to lower borrowing costs, or leave them unchanged – and, significantly, whether they all agreed on the decision! The City is widely expecting a quarter-point cut in interest rates, to bring Bank rate down from 4.25% to 4%. Some of the nine members of the BoE’s monetary policy committee may push for a deeper cut, fearing that rising unemployment and weakening economic activity is flashing the alarm.

On the other side of the table, though, hawkish MPC members may point to inflation – which rose to 3.6% in June – as a reason to leave rates on hold. Guillermo Felices, global investment strategist at PGIM Fixed Income, says a 25 basis point (quarter-point) cut is “almost a done deal”, adding: We expect a further 50bps of rate cuts over the 3 following meetings, as the Monetary Policy Committee begins to put more weight on the weak labour market. The Bank also has to weigh up the impact of Donald Trump’s trade war. The UK’s trade deal with the US means the direct impact from tariffs is relatively limited, but there is the global situation to consider too.

Earlier this morning, the latest wave of country-specific tariffs came into force, a week after Trump announced them. Switzerland failed to reach a last-minute deal to lower its rate from 39%. Swiss president Karin Keller-Sutter reportedly left Washington empty-handed last night, following a meeting with US Secretary of State Marco Rubio. The agenda 7am BST: Halifax house price index for July Noontime BST: Bank of England interest rate decision 12.30pm BST: Bank of England press conference 1.30pm BST: US weekly jobless report

Share 19m ago 03.39 EDT Professor Costas Milas, of the University of Liverpool’s management school, predicts that UK interest rates will be cut today, and further in the months ahead, telling us: Trump’s trade wars have now taken concrete shape. I expect these to add approximately 0.5 percentage points to UK inflation by mid-2026, followed, nevertheless, by a rapid inflation retreat as UK growth takes a material hit. Based on my recent estimates for the LSE Business Review blog, the Bank’s policymakers will almost certainly respond by cutting Base Rate by 0.25 percentage points today [from 4.25% to 4%]. From here onwards, I expect another cut of 0.25 percentage points before the end of 2025 and Base Rate ending up at 3.25 per cent by mid-2026. Assuming no further Trump related uncertainty shocks (a brave assumption indeed!), Base Rate could end up to 2.75 per cent by mid-2027.

Share 21m ago 03.36 EDT Intriguingly, shipping giant A. P. Moller-Maersk has raised its financial outlook for this year despite Trump’s trade wars. In its latest results, Maersk has lifted its forecast for global container market volume growth up to between 2% and 4%, from a previous forecast of between -1% and 4%. Maersk said it was lifting the guidance “given the more resilient market demand outside of North America”, while cautioning that “disruption in the Red Sea is still expected to last for the full year”. Vincent Clerc, CEO of Maersk, said the company had a strong first half of 2025, adding: Even with market volatility and historical uncertainty in global trade, demand remained resilient, and we’ve continued to respond with speed and flexibility. As our customers navigate these complex challenges, we remain committed to helping them build stronger and more adaptable supply chains— making sure they are ready to not just weather disruption, but to grow through it.

Clerc also told Bloombert TV that conditions in the US were subdued owing to the uncertainty from trade tariffs, but that a boom in Chinese manufacturing was fueling very strong levels of demand. 📢 Maersk achieved strong results in Q2 2025. Results were in line with the previous year despite significant geopolitical uncertainty. Given the more resilient market demand outside of North America, #Maersk raises the 2025 financial guidance: https://t.co/8Vt9zuOxnx pic.twitter.com/cCwlLjwpZt — Maersk (@Maersk) August 7, 2025

Share 31m ago 03.26 EDT U.S. 100% tariff plan on semiconductors ‘devastating’ for Philippines, industry association says Donald Trump’s plan to impose 100% tariffs on semiconductors would be “devastating” for the Philippines, an industry leader has warned today. The president of the Philippine semiconductor industry Dan Lachica said that around 70% of the country’s electronic exports are semiconductors, Reuters reports.

Share 33m ago 03.24 EDT Last night, Donald Trump declared that hefty tariffs will soon be imposed on semiconductor imports, although there will be carveouts for firms investing in their US chip-making operations. During a meeting with Apple’s Tim Cook, Trump declared: “We’ll be putting a tariff of approximately 100% on chips and semiconductors. But if you’re building in the United States of America, there’s no charge.” Shares in Apple rose 2.8% in afterhours trading, suggesting traders believe it will be insulated from this tariff as it has now pledged to invest a total of $600bn in its US manufacturing. Shares in chipmakers Invel and Nvidia also rose in afterhours trading.

Analysts at Swiss Bank UBS argue that the potential damage from semiconductor tariffs appears manageable, and that they will not derail the opportunities in the artificial intelligence space. Mark Haefele, chief investment officer at UBS Global Wealth Management, told clients: “While we continue to expect near-term volatility, long-term investors underallocated to our Transformational Innovation Opportunities can consider using market dips to add exposure to these structural growth stories.”

Share 44m ago 03.14 EDT India’s stock market has fallen today as traders digest the additional 25% tariff announced by the US on Wednesday. The benchmark Sensex index has dropped by 0.5%.

Share 48m ago 03.09 EDT India: Additional 25% tariff is ‘extremely unfortunate’ India’s foreign ministry has described Trump’s decision to impose an extra 25% on its exports to the US as “extremely unfortunate.” The ministry added that “India will take all necessary steps to protect its national interests.” Yesterday, the White House announced it was placing an additional 25% tariff on imports from India, bringing total tariffs up to 50%, in retaliation for the country’s purchase of oil from Russia, Trump threatens 50% tariffs on India over ties to Russia and Brics bloc Read more “The U.S. tariff hike lacks logic,” Dammu Ravi, secretary of economic relations in India’s foreign ministry, told reporters, adding: “So this is a temporary aberration, a temporary problem that the country will face, but in course of time, we are confident that the world will find solutions.” Indian prime minister Narendra Modi has commented too, saying he will not compromise the interests of the country’s farmers . Modi told a function in New Delhi: “For us, our farmers’ welfare is supreme. India will never compromise on the wellbeing of its farmers, dairy (sector) and fishermen. And I know personally I will have to pay a heavy price for it.”

Share 1h ago 02.52 EDT China’s exports beat forecasts as shippers rush to meet tariff deadline New trade data today has shown that Chinese manufacturers have been taking advantage of the trade war truce between Washington and Beijing. China’s exports rose 7.2% year-on-year in July, customs data showed on Thursday, faster than expected, and also quicker than the 5.8% growth recorded in June. Imports grew 4.1%. The pick-up in trade comes after the US and China agreed to extend their truce in June, following talks in London. That pause is due to end next week. #China trade data in July 2025: EXP: +7.2%Y, IMP: +4.1%Y, surplus: $705.1bn — #exports to the U.S. fell 21.67%Y, while shipments to ASEAN rose 16.59% over the same period, chart @ReutersBiz .com https://t.co/ZpW7wtFn3n pic.twitter.com/r97tYKARY5 — ACEMAXX ANALYTICS (@acemaxx) August 7, 2025

Share 1h ago 02.48 EDT Swiss urged to enlist Fifa chief to help lower Trump tariffs Switzerland could turn to the head of Fifa to help them cut a US trade deal, after failing to persuade Donald Trump not to add a 39% tariff to its goods. The Federal Council of Switzerland has announced it will hold an extraordinary meeting this afternoon after its delegation to the U.S. returned empty-handed. Tariffs: After its delegation returns from the USA, the Federal Council will hold an extraordinary meeting in the early afternoon. A statement will follow after the meeting. — Bundesrat • Conseil fédéral • Consiglio federale (@BR_Sprecher) August 7, 2025 The meeting will be held after Swiss president Karin Keller-Sutter left Washington empty-handed on Wednesday, without persuading US officials to lower the Swiss tariff. There is now pressure to get Fifa president Gianni Infantino onto the pitch – as the Swiss-Italian football administrator has a notably good relationship with Trump. Uefa accuses Infantino of pursuing ‘private interests’ on Trump’s tour Read more Swiss national councillor Roland Rino Büchel has told the Financial Times that economy minister Guy Parmelin should speak to Infantino, saying: “It is definitely time to bring in Gianni Infantino now without further delay to help open doors. If Parmelin picked up the phone and asked Infantino for help I would well imagine he would do it.”

Share Updated at 02.48 EDT 1h ago 02.31 EDT Toyota warns it will take $9.5bn hit from Trump tariffs Japanese carmaker Toyota has warned that US tariffs could cost it almost $10bn this year, a sign of the impact of Trump’s trade war. Toyota, the world’s biggest automaker, has cut its operating profit forecast for the current financial year to ¥3.2tn (£16bn) down from a previous outlook of ¥3.8tn (£19.3bn). Toyota also predicted it would suffer a ¥1.4 trillion ($9.5 billion) hit to its bottomline from the year. Under the trade agreement between Tokyo and Washington, Japanese auto exports into the US should face a 15% tariff, down from 27.5% previously, but the change has not yet come into effect.

Share 2h ago 02.23 EDT Trump claims tariff money will flow into US Donald Trump hailed the new tariffs which kicked in at 5am UK time, or just after midnight on the US east coast. The US president repeated his claim that money was now “flowing” into the US, even though it is US importers who will stump up these new levies on goods from overseas. Writing on his Truth Social site, Trump says: IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA! Trump also challenged the US courts not to block him, saying: RECIPROCAL TARIFFS TAKE EFFECT AT MIDNIGHT TONIGHT! BILLIONS OF DOLLARS, LARGELY FROM COUNTRIES THAT HAVE TAKEN ADVANTAGE OF THE UNITED STATES FOR MANY YEARS, LAUGHING ALL THE WAY, WILL START FLOWING INTO THE USA. THE ONLY THING THAT CAN STOP AMERICA’S GREATNESS WOULD BE A RADICAL LEFT COURT THAT WANTS TO SEE OUR COUNTRY FAIL!