The European Central Bank left its key interest rate unchanged at 2% on Thursday, with President Christine Lagarde describing the bank as being in a "good place" despite the threat of US tariffs. She said the ECB will remain "data-dependent" on future moves and would not rule out any action depending on the outcome of trade negotiations.
In the UK, businesses are cutting jobs at the fastest pace since February, reacting to higher taxes and global uncertainty caused by Donald Trump's tariff threats. Meanwhile, Britain may face lower gas stockpiles this winter after the owner of British Gas indicated it plans to sell stored gas to reduce losses at a North Sea storage facility.
Lloyds Banking Group's chief executive has warned Chancellor Rachel Reeves that increasing taxes on banks in the autumn Budget would undermine Labour's plans for the City of London to drive economic recovery. The warning comes amid broader concerns about the UK's economic outlook.
The ECB's decision to hold rates reflects caution as the trade war situation evolves. Analysts noted that while inflationary pressures have eased, uncertainty is holding the bank back from further loosening. Markets are now watching for any escalation in trade tensions that could affect economic growth across Europe and the UK.
