The Bank of England plans to cut interest rates by a quarter of a percentage point this week to 4.25%, which could pave the way for a series of consecutive cuts for the first time since 2009, due to the pressures of Trump's tariff war.

Markets briefly priced in 4 more quarter-point cuts over the next six meetings, marking the first time in 7 months that they expect interest rates to drop to 3.5%, according to Bloomberg.

Former Bank of England economist Michael Saunders said that rising U.S. tariffs and worsening uncertainty in trade policy essentially represent a negative demand shock, which will reduce growth and inflation.

The bank expects inflation to peak at 3.7% this year, and its governor Andrew Bailey warned last month that a global trade war would significantly impact open economies like the UK.