The Bank of England put a dovish twist to an expected rate cut, sending the British pound and bond yields lower. The central bank, as expected, cut interest rates by a quarter-point, its third reduction since August, to 4.5% from 4.75%.

Britain's central bank cut its main interest rate in response to a troubling mix of stuttering growth, stubborn inflation and President Trump’s tariff threats. Sterling lost about 0.5% against the dollar,

The Bank of England is expected to cut interest rates to their lowest level in more than 18 months amid weak British growth and falling inflation. Traders are predicting that policymakers will reduce borrowing costs in the wake of official figures which showed inflation unexpectedly fell to 2.5pc last month.