The US Federal Reserve tonight kept US interest rates on hold in defiance of Donald Trump’s call for a cut.
Jerome Powell, the central bank’s chair, warned that the president’s tariffs are likely to be inflationary and weaken growth.
Policymakers chose to leave the benchmark interest rate unchanged in a range of 4.25% to 4.5% for the third consecutive meeting, stating that “uncertainty about the economic outlook has increased further.”
Mr Trump declared that he would fire Mr Powell for not cutting rates, but later backed off and said he had no intention of doing so. Even so, he and Treasury Secretary Scott Bessent have said the Fed should cut rates.
The decision came ahead of the Bank of England’s meeting to decide UK rates, with expectations that the monetary policy committee will shave a quarter point off base rate in response to growth concerns over Mr Trump’s tariffs.
Inflation was also lower than expected in March at 2.6%, down from 2.8% the previous month.
The decision will be announced at 12.02pm, two minutes later than usual because of the two-minute silence to mark VE Day.
London stocks ended lower on Wednesday, with the top-flight index snapping a 16-day winning streak as investor caution ahead of the US Federal Reserve’s policy decision weighed on sentiment.
The FTSE 100 index fell 0.44% to 8,559.33 points, while the FTSE 250 edged down 0.08%.
In economic news, the UK construction sector remained under pressure in April, according to data published earlier, though the pace of decline moderated slightly.
The S&P Global UK construction purchasing managers’ index (PMI) edged up to 46.6 from 46.4 in March, defying forecasts for a sharper drop to 45.7.
While the reading remained below the 50.0 threshold that signals contraction, it marked the slowest decline in output in three months, supported by a smaller fall in residential building activity.
Marks & Spencer edged up 0.14% in a modest rebound from recent losses linked to operational disruption caused by a cyberattack.
Warm spring weather helped lure drinkers to JD Wetherspoon’s pubs and lifted its outlook for the year.
The pub chain reported a 5.6% increase in like-for-like sales during the 13 weeks ending 27 April.
The FTSE 250 group opened two pubs and sold seven over the period and plans to open up to another five pubs in the present financial year and about ten next year.
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