Reeves to hold tariff talks as ECB cuts interest rate – Daily Business

Chancellor Rachel Reeves has said she will hold talks with the White House next week amid efforts to strike a UK-US trade deal, despite Donald Trump downplaying the likelihood of any imminent agreements.

Ms Reeves hopes a deal can help soften the brunt of the US president’s sweeping 10% tariffs on all goods imported to America, with the Telegraph reporting that officials in Washington believe an agreement could be weeks away.

“Those conversations with our US counterparts are ongoing,” said Ms Reeves in a media interview.

“I will be in Washington next week for the International Monetary Fund annual meetings, their spring meetings.

“I will also be having conversations with the US administration whilst I’m there.”

Mr Trump has played down any prospect of an early deal, saying he was in “no rush” to reach any deals because of the revenues his new tariffs are generating.

Concern over President Trump’s impact on growth led the European Central Bank to cut interest rates for the seventh time since June.

The ECB lowered its main rate for 20 countries using the euro to 2.25% from 2.5% in a broadly anticipated move that represents the most aggressive central bank loosening of monetary policy.

It comes after the US President imposed a 20% tariff on the bloc, twice the level of the UK, as he claimed the EU had been “ripping off” America for years.

The ECB’s governing council said: “The euro area economy has been building up some resilience against global shocks, but the outlook for growth has deteriorated owing to rising trade tensions.

“Increased uncertainty is likely to reduce confidence among households and firms, and the adverse and volatile market response to the trade tensions is likely to have a tightening impact on financing conditions.”

The Bank of England has cut its base rate once this year to 4.5% and the US Federal Reserve has left rates unchanged in a range between 4.25% to 4.5%.

Inflation in the UK has fallen to 2.6%, but expectations are that it will rise to about 3.7%. Despite that, the Bank is still forecast to cut the base rate at its meeting next month.

President Trump has turned up the heat the Federal Reserve, saying the “termination” of Jerome Powell as chairman “cannot come fast enough”.

In a post on his social media platform Truth Social, responding to Mr Powell’s concerns this week about the impact of tariffs on the US economy, Trump branded him as “TOO LATE AND WRONG” and demanded immediate interest rate cuts.

He wrote: “Too late, should have lowered interest rates, like the ECB long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!”

The International Monetary Fund said it will deliver a significant markdown to its global growth projections for this year, though it is not yet forecasting a recession for the world economy as a result of US tariffs.

In her first public comments after President Trump’s decision to hit China with record import taxes, Kristalina Georgieva, managing director of the IMF, said the world’s growth prospects would be lower, inflation higher, with a risk of escalating financial market stress from US protectionism.

Major indices were mostly lower at the close of trading on Thursday as traders packed up for the Easter long-weekend break.

At the close, the Dow Jones Industrial Average was down 1.33%, while the S&P 500 picked up 0.13% and the Nasdaq Composite saw out the session 0.13% weaker at 16,286.45.