U.K. central bank cuts interest rates as economy slumps

What they're saying: In a policy statement, the Bank of England said there had been enough progress on lowering inflation to warrant a rate cut, though it plans to keep rates elevated "so as to continue to squeeze out persistent inflationary pressures."

• Bank of England governor Andrew Bailey said it is still unclear how Trump's trade policies will shake out and what ultimate impact it will have on the economy.
• "There is global uncertainty, we're all witnessing it day-to-day," Bailey told reporters at a press conference.

The intrigue: Two Bank of England officials argued for a more dramatic cut to interest rates — by a half-percentage point — to guard the economy.

• The U.K. is the latest central bank to diverge from the Federal Reserve, which has opted to keep rates on hold, in part to evaluate how Trump's policies could impact the economy.

What to watch: The U.K. government took steps last year to invest in the economy, in order to address productivity and growth issues that have weighed on it for years.

• But in a roundabout way, those measures have been complicated by expected policies in the United States, including tariffs and lower tax rates.
• That has prompted a global bond sell-off that has sent yields surging, making it more expensive for governments — including the U.K. — to borrow.

The bottom line: The U.S. economy remains in solid condition. The opposite is true across the pond, where inflation is persistent and growth has cooled — with unknown risks from Trump's trade policy.

• Bailey pushed back against characterizations of such an economic mix: "I don't use the word stagflation," Bailey said.