- FTSE 100 down 30 points at 8,530, FTSE 250 up 0.4%
- Bank of England cuts rates to 4.25%
- Trump confirms details of UK-US trade deal
- Next hikes guidance after quarterly sales get weather boost
- Harbour Energy (LON:HBR) jumps after bullish update, but Centrica (LON:CNA) falls
4.13pm: Rolls ’tariff free’
Rolls-Royce Holdings PLC (LSE:LON:RR.) shares have flown higher, having been on the rise since this morning after the news of a UK-US trade agreement.
US Commerce Secretary Howard Lutnick has just said he has "allowed Rolls-Royce engines and plane parts to come over tariff-free".
This sent the shares spiking to just under 800p, up 4%.
4.04pm: Starmer and Trump give vague details on vague UK trade deal
The FTSE 100 and FTSE 250 are continuing to sink lower, with the blue-chip index down 0.4% and the mid-cap one up 0.4%.
PM Kier Starmer said the US-UK trade will boost trade and create jobs.
He calls trade deal "a fantastic platform" and "hugely important" for cars and steel.
Donald Trump has also doles out a few words in the Oval Office (with UK Ambassador Peter Mandelson looking on). After a bit of waffle, he says the UK trade deal is "good for both countries" and will bring the UK back into “economic security alignment” with the US.
The US and UK have agreed to “work together on steel”, and the deal increases access for US beef and ethanol, he says.
The UK will eliminate non-tariff trade barriers, he says, with US goods to “move fast” through customs.
Final details of the deal are being written up in the coming weeks.
.@POTUS lays out the details of the trade deal with the United Kingdom (TADAWUL:4280):"So good for both countries." pic.twitter.com/EFFPy93Qi5
— Rapid Response 47 (@RapidResponse47) May 8, 2025
3.25pm: Leaked details
The US is cutting tariffs on UK-made cars to 10%, while tariffs on beef will be cut close to zero.
This is from the Telegraph.
The "reduction will form part of a 12-month ‘temporary arrangement’ ahead of striking what Britain and the US hopes will be a comprehensive trade deal in the coming months".
PM Kier Starmer will deliver a news conference at 4pm, with Trump delayed up to 30 mins
.@SecRollins on the trade deal with the UK: "This is just the first of what will be many new and better opportunities as President Trump realigns the world around putting America -- and American agriculture first." pic.twitter.com/Suh4fzrnhm— Rapid Response 47 (@RapidResponse47) May 8, 2025
3.21pm: Trade announcement still awaited
A delay to the US-UK trade deal announcement.
London lobby reporters mention that their location has been changed.
While in Washington DC, one journalist says reporters are "gathered and waiting" for the trade announcement.
"I was told about an hour ago that details in the agreement were still changing, and no information was final until the actual event. So that could explain the hiccup here," says CNBC correspondent Eamon Javers.
2.47pm: Wall Street opens higher, FTSE in the red
US markets have opened higher, though not as much as futures had been pointing to earlier.
The Nasdaq has gained 0.6% shortly after the open, with the S&P 500 and Dow Jones both rising 0.5% and the small cap Russell 2000 jumping 1%.
Back in London, the FTSE 100 is down and the FTSE 250 is continuing to give up its gains as we wait on the UK-US trade agreement announcement.
2.06pm: US trade deal will move markets more than BoE
The BoE may have cut rates, but there were "plenty of surprises", says Kathleen Brooks, research director at XTB, who adds that the US trade deal "derails" the MPC’s dovish stance.
The first surprise was the three-way vote split, with Catherine Mann and Huw Pill voting to keep rates unchanged, and the second was the intent to maintain a "gradual and careful" approach to further cuts.
This line, which has been included in recent statements, was expected by many analysts to be removed in May due to new downside pressures on inflation.
"Instead, we believe that the BoE chose to keep that line in their statement because of the announcement that a US/UK trade deal is coming," says Brooks.
In his press conference after the announcement, Governor Andrew Bailey said that the announcement of a trade deal was welcome news, and it would reduce economic uncertainty, but more trade deals would need to be announced for the BoE to be confident about the outlook for the UK economy.
Brooks also reckons the MPC is underplaying some of the deflationary risks, like lower energy prices.
On Wednesday, the market was expecting a 55% chance of a rate cut in June, and for more than 2.5 rate cuts for the rest of the year.
However, after today’s announcement, the market has scaled back a June cut to a 20% chance, with the next full cut expected in August
"Overall, the BOE was more hawkish than expected, but we think that the main move in UK assets will come once we get the details of the trade announcement at 1500 BST," says Brooks.
1.41pm: Tariff details
The FTSE 100 has seen its gains cut to almost nothing, with the FTSE 250 also losing some of its froth.
News on the wires suggests the UK-US trade pact will leave the 10% blanket tariff in place.
In fact that’s from CNN.
1.18pm: EU launches WTO dispute, consultation on countermeasures
The EU is launching a dispute with the World Trade Organisation against the US ’reciprocal’ tariffs and tariffs on cars and car parts, saying it is formally lodging a request for consultations.
While talks between Brussels and Washington are ongoing, EU Commission President Ursula von der Leyen said the EC is continuing to prepare "for all possibilities".
This includes preparing potential countermeasures, with a public consultation launched today on a list of US imports that could become subject to EU tariffs if talks are not successful.
"Tariffs are already having a negative impact on the global economies. The EU remains fully committed to finding negotiated outcomes with the US," she said.
The consultation concerns a list of US imports worth €95 billion, covering a broad range of industrial and agricultural products, while also consulting on possible restrictions on certain EU exports of steel scrap and chemical products to the US worth €4.4 billion.
On the WTO dispute, the EU said its unequivocal view is that "these tariffs blatantly violate fundamental WTO rules".
1.07pm:
Deutsche Bank’s chief UK economist, Sanjay Raja, says the MPC "basically took a step back to where they were a month or two ago".
"This is a more divided MPC. While the direction of policy is still down, the MPC continues to drag its feet on both the speed and scale."
A "careful” calibration of monetary policy is still very much a large part of the MPC’s parlance. And that doesn’t seem to be changing. The probability of sequential back-to-back rate cuts should drop on the back of this. And the path of least resistance should be quarterly rate cuts until we see more progress/clarity on the labour market and inflation. We think this could happen in Q4-25 when we get a sense of where 2026 pay settlements are going.
12.36pm: Today a ’key inflection point for UK’
The Bank of England’s decision to cut the benchmark rate of interest does not come as a surprise, the 5-4 split in the vote by the MPC "highlights the challenges the central bank faces, with with higher tariffs potentially translating into slower growth," says Richard Flax, chief investment officer at Moneyfarm.
"Today’s rate cut could end up being a key inflection point for the UK economy, especially if it is followed in short order by a tariff mitigation deal with the United States – a development that would offer some relief to exporters and bolster sentiment," Flax adds.
"Coming not long after the recently concluded trade agreement with India, the world’s fastest-growing major economy, it could also signal a broader strategic shift in the UK’s approach to trade, growth, and monetary flexibility."
Susannah Streeter, head of money and markets at Hargreaves Lansdown (LON:HRGV), says: "By cutting borrowing costs, they’re hoping to relieve pressure on businesses, stimulate demand in the economy and shine a light towards a recovery.
"Although the framework of a trade deal with the US is expected to be announced later, which should alleviate some unpredictability for businesses, there is still plenty of uncertainty around about the global effects of trade wars on the UK economy."
While inflation is still above target, deflationary forces at work, she says, with "worrisome consequences for growth" likely to act as a dampener on price rises.
"A recession rather than stubborn inflation is the ogre to avoid right now. The niggling worry of high pay demands looks set to be fading into the background given that hirings have been scaled back by many firms. There is also the chance that an influx of cheaper Chinese-made goods could infiltrate the retail scene and land in virtual baskets."
12.19pm: More cuts are coming
Some thoughts on the MPC decision.
The Bank "may go further in coming months", says Jeremy Batstone-Carr, strategist at US broker Raymond (NSE:RYMD) James.
"Falling oil and gas prices and the relative strength of the pound against the dollar provided further ammunition for today’s rate cut," he says, with pockets of price pressures but policymakers "confident enough" in the deflationary impact of tariffs and downside risks to the growth outlook to lower interest rates.
"As important for hard-pressed British households and businesses as today’s decision is, the Bank is cautiously signalling it is likely to go further in coming months, looking past the strong likelihood that near-term inflationary pressures are likely to rise."
12.10pm: Lower inflation and growth forecast, MPC open to a change of course
Alongside the interest rate decision, the BoE released a new set of economic forecasts, including a new prediction that CPI inflation will be 2.4% in one year’s time, down from its forecast of 3% at the last February report.
The Bank sees energy prices as likely to drive up CPI inflation from April onwards to 3.5% in the third quarter of 2025 before inflation falls back thereafter.
Gross domestic product is now expected to grow 1.0% in 2025, up from the February forecast of 0.75%, with 2026 anticipated to see 1.25% growth, which is lower than the previous 1.5% and the 2027 growth prediction was slashed to 1.5% from the previous 4.5%, before Donald Trump’s full tariff announcements.
"Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate," the monetary policy committee said in a statement.
The MPC seems to be flagging that it could speed up the rate of cuts if necessary, as US tariffs have led to volatility in financial markets and weaker prospects for global growth.
In the statement is say the MPC has "considered a range of possibilities for how domestic inflationary pressures could evolve, as well as the broader circumstances that could necessitate varying the course of policy".
"Monetary policy is not on a pre-set path. The Committee will remain sensitive to heightened unpredictability in the economic environment and will continue to update its assessment of risks."
12.04pm: BoE cuts, 5-4 close decision
The Bank of England has cut the base rate of interest, Bank Rate, to 4.25% from 4.5%.
It said its monetary policy committee vote by a majority of 5-4 to reduce Bank Rate by 0.25 percentage points, with two members preferring a bigger 0.5 percentage points, to 4%, and another two wanting to maintain the rate at 4.5%.
11.38am: Trump says UK trade deal ’comprehensive’
President Trump is up and posting on social media, confirming that the "major trade deal" he flagged yesterday will be with the UK and that it will be "full and comprehensive".
He’s probably been seeing reports that Washington and London will announce a limited deal covering just a few sectors.
But Trump says in a post on his Truth Social platform: "The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come.
"Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement."
He adds: "Many other deals, which are in serious stages of negotiation, to follow!"
10.41am: Weir (LON:WEIR) so back
Weir Group PLC (OTC:WEGRY) (LSE:WEIR) shares are up as UBS has upgraded to a ’buy’ rating and increased its price target to 2,850p.
The buy thesis is mostly driven by a view that there is "significant upside to the savings that Weir can achieve from their Performance Excellence plan.
"However, we also think Weir is the best protected amongst peers in the event of a downturn following recent tariffs," analyst Ed Hussey says.
10.08am: FTSE 250 among outperformers
Even though the UK is set to get a rate cut and a US trade deal, the FTSE 100 is still underperforming its Continental cousins, up 0.2% compared to a 1% rise for Germany’s DAX and 0.7% for France’s CAC 40.
The FTSE 250, a more representative index of the UK economy than the multinationals of the blue-chip benchmark, is up a more respectable 0.9%.
Top riser is Renishaw PLC (LSE:LON:RSW), up 17% on its trading update and the US trade deal reports, followed by Harbour Energy PLC (LSE:HBR), on its own update.
Aston Martin (LON:AML) Lagonda Global Holdings PLC (LSE:AML) is up 8.5% on the US agreement reports.
US futures are also pointing to a strong session ahead, with Nasdaq futures up 1.25%, those for the S&P 500 up 0.9% and for the Dow Jones 0.6%.
The tech-led gains, which are being mirrored by rises for Scottish Mortgage Investment Trust PLC (LSE:LON:SMT) and Polar Capital Technology Trust PLC (LSE:LON:PCT) on the Footsie are reports that the Trump administration will end chip export restrictions.
"Previous US president Joe Biden had imposed restrictions on who could buy America’s most advanced technology, partly as a way to stop China getting its hands on chips that could enhance its military capabilities," says analyst Russ Mould at AJ Bell (LON:AJBA).
"There is now the view that China seems to be capable of developing its own technological capabilities, so perhaps Trump has taken the view that it’s better to make money by selling US products to China as the country was always going to advance its capabilities one way or another.
"It could be part of Trump’s bargaining strategy to strike a deal with China. If Trump can say the US has done China a favour by reopening the door to US chips, he might think the US is owed something back by the Asian superpower."
9.40am: US trade deal
Today’s set to be a big one for the UK economy, with not only an interest rate cut but also a trade agreement with the US expected to be announced this afternoon.
The full scope of the deal remains under wraps, but both governments have confirmed that it will focus on lowering duties in sectors that have been especially hard hit, with particular attention on the UK automotive and steel industries.
Cars and steel exports are expected to be the target for the UK, with concessions offered on food and agriculture imports and digital taxes.
The announcement is scheduled for 3pm UK time, when Donald Trump is expected to speak from the Oval Office. Prime Minister Keir Starmer is also due to provide a formal statement later in the day.
Last night Trump posted on Truth Social: “Big news conference tomorrow morning at 10:00am, the Oval Office, concerning a MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY. THE FIRST OF MANY!”
As the UK does not have many tariffs on US goods and has a balanced trade arrangement with the US, this deal seems to probably be mostly for show for Trump.
The pound climbed slightly to $1.3356 overnight but is back at $1.328 this morning.
Market analyst Neil Wilson at Saxo Markets says: "We don’t know what any terms will look like for different sectors of the economy and the devil is in the detail...but we can look at a very back-of-fag-packet maths to see which stocks might be affected by a trade deal by looking at US revenue exposure – Rolls-Royce, BAE Systems (LON:BAES), GSK (LON:GSK) and AstraZeneca (LON:AZN) perhaps."
Aston Martin, which had suspended exports to the US, is up 6% on the news.
"Any trade deal is better than none right now, but it takes a long time to negotiate a full trade deal so there could be some disappointment if there is only a very broad framework and a lack of detail."
9.14am: Think tank cuts UK economic forecasts
The UK economy will grow just 1.2% in 2025, the National Institute of Economic and Social Research (Niesr) forecasts, down from its earlier forecast of 1.5%.
It cited weak business confidence (see the recent PMI and CBI surveys) and global uncertainty, as well subdued domestic demand.
Slower growth would translate into lower tax receipts, making it harder for the Government to meet its targets for reducing debt and achieving a budget surplus.
Niesr estimates a potential shortfall of £62.9 billion by 2029/30, in contrast to the £9.9 billion headroom forecast by the Treasury in March.
The think-tank also expects inflation to average 3.3% this year, significantly above previous expectations and a CPI increase of 2.6% in March.
8.50am: Centrica slides
Centrica shares are down over 7% as the British Gas owner warned of lower profits in its energy trading business and higher losses for its storage arm.
Centrica Energy profits are being hit by "challenging market conditions" in gas and power trading, though its LNG and RETO businesses continue to perform well.
Centrica Energy Storage+ is expected to post an adjusted operating loss at the higher end of the previously guided range.
The company said it is in "constructive discussions" with the UK government to secure regulatory support for a £2 billion investment to expand the Rough storage facility, including plans to convert it into a hydrogen-ready site.
8.27am: Harbour master
Shares in Harbour Energy PLC (LSE:HBR) jumped 10% in early trade as the mid-cap oil company reported much stronger production, lower costs and tightened its guidance slightly upwards.
Production averaged 500,000 barrels of oil equivalent per day (kboepd) in the first quarter, significantly higher than the 172,000 kboepd recorded a year ago thanks to the Wintershall Dea acquisition last year.
Amid recent energy market volatility, CEO Linda Z Cook highlighted the company’s "prudent approach to risk management", with a 2025 hedge position covering around 40% of liquids and European gas volumes, along with a recent $1.8 billion of bond issuance and "mitigating actions" that she said would "largely offset the impact of lower commodity prices".
8.13am: FTSE 100 gets off to OK start
The FTSE 100 trotted off to an OK start, up 13 points so far at 8,572.
Engineers Weir and IMI (LON:IMI) are among the top risers - possibly on the back of the Renishaw update (see below), but also the expected US trade deal.
Tech investors Scottish Mortgage and Polar Capital Technology are also up there.
IHG shares are up 2.2% after its Q1 update, dragging aircraft engine maker Rolls-Royce in its wake.
Next has gained 1.6% after upping its profit outlook.
8am: Renishaw makes a bit of a recovery
Engineer Renishaw PLC (LSE:RSW) is introducing a surcharge to pass on the impact of additional costs from US tariffs, and has upped its guidance for full-year sales and profits.
The FTSE 250 group, which spooked investors with its interim results in February, reported revenue of £180.7 million for its third quarter, a 5% year-on-year increase. This compares to 3% growth in the first half.
It said the surcharge is being added as exports to the US, representing roughly 20% of global revenues, are seeing products being hit by Donald Trump’s 20% tariffs on aluminium and steel based on the mass of their material content, or subject to the 10% ’reciprocal’ tariff regime on output from its factories in the UK, Ireland and India.
7.44am: IHG books solid start to the year
Holiday Inn owner Intercontinental Hotels Group PLC (LSE:NYSE:IHG) has reported a solid first quarter, where good demand in Europe and the Middle East offset a continued decline in China.
Global revenue per available room (revpar) grew 3.3% for the first quarter of 2025, compared to 3.0% over the whole of last year.
The FTSE 100 group says it’s "on track" to meet current full year 2025 consensus profit expectations, but stresses that it’s still early days.
7.23am: Next lifts profit outlook
Next PLC (LSE:LON:NXT) has beaten expectations for sales in its first quarter and, while it has not changed its full-year sales guidance, has nudged up its profit outlook.
Full-price clothing sales in the 13 weeks to 26 April rose 11.4% compared to a year ago, versus the previous target of 6.5% growth, which the clothing chain says was mostly due to warmer weather increasing demand for summer clothing.
The full-year outlook for group pre-tax profits has been lifted £14 million to £1.08 billion.
7.16am: UK-US trade deal
Last night, Donald Trump teased that a "major trade deal" will be announced today at 10am DC time (3pm UK), which media reports have since suggested is with the UK.
"In a Trump 2.0 world it often seems like the news flow doesn’t really get going until after the US market closes and today is another example of that," says Deutsche Bank (ETR:DBKGn)’s Jim Reid.
"The media are all lining up behind the deal being with the UK.
"Given that full trade deals take years to negotiate, this will likely be a framework and it will be interesting to see whether the 10% baseline tariff stays as that will provide an important template for negotiations with other countries and a good guide to the long-term tariff strategy of the US."
7.09am: FTSE 100 to pick itself back up after ending winning run
The FTSE 100 is to get back on the horse and ride higher on Thursday, ahead of an expected Bank of England interest rate cut later today and reports that a trade deal with the US has been agreed.
Yesterday, the London index was bucked off its 16-day winning run, falling 38 points to 8,559.33 in synch with a wider decline on European markets.
Overnight, US stocks were mostly more bullish, with all the main indices finishing higher, led by a 0.7% gain for the Dow Jones helped a large part by an 11% jump from Disney (NYSE:DIS). The S&P 500 and Nasdaq rose 0.4% and 0.3%.
The US Federal Reserve kept interest rates unchanged, as widely anticipated, and signalled it is in no rush to make cuts as it wants more data to assess the real impact of the tariff policy.
Asian markets are mixed, generally higher, with the Nikkei, Hang Seng and Shanghai Composite all in green.
7am: What to watch on Thursday
It is the Bank of England’s turn on Thursday, its first meeting since holding rates steady at 4.5% at the March meeting of the monetary policy committee.
The May meeting is widely expected to see rates cut to 4.25%, with economists and analysts at odds over whether the MPC will leave the door open to more cuts in coming months or play their cards close to their chest...read more
After a bruising run for European travel stocks, some analysts have softened their stance on the likes of Intercontinental Hotels Group PLC (LSE:IHG) ahead of the operator of Holiday Inn and Crowne Plaza’s quarterly results...read more
Announcements due on 8 May:
Trading updates: Derwent London (LON:DLN), Harbour Energy, Helios Towers, IMI, InterContinental (LON:IHG) Hotels, Mondi (LON:MNDI), Rathbones Group, S4 Capital, TBC Bank
Finals: Lords Group (LON:LORD), Polarean Imaging
Overseas earnings: Anheuser-Busch Inbev, ConocoPhillips (NYSE:COP), Shopify, Takeda Pharmaceutical (TADAWUL:2070) (both premarket), Cloudflare (NYSE:NET), Coinbase Global (NASDAQ:COIN), Illumina, Pinterest (NYSE:PINS) (after)
Ex-dividends to reduce FTSE 100 by: 8.88 points (HSBC (LON:HSBA), RELX)
AGMs: Aberdeen Group, Abrdn Asian Income Fund, Antofagasta (LON:ANTO), Balfour Beatty (LON:BALF), Cairn Homes, Centrica, Cirata, Fidelity European (LON:FEV) Trust, Grafton Group, Gym Group, Harbour Energy, Indivior, InterContinental Hotels Group, Irish Continental Group, Jupiter Fund Management (LON:JUP), Mondi, Mony Group, OSB Group, Personal Group Holdings, Rathbones Group, Reckitt Benckiser (LON:RKT) Group, Rosebank Industries, TBC Bank Group, Uniphar, Wickes Group (LON:WIX)
Economic announcements: Bank of England Policy Decision (UK), Halifax House Price Index (UK), Balance of Trade (GER), Industrial Production (GER), Initial Jobless Claims