Business
Interest rates cut to 3.75% but further reductions to be ‘closer call’
Michael RaceBusiness reporter
Getty ImagesInterest rates have been cut to 3.75%, the lowest level in almost three years, but further reductions are set to be a “closer call”, the Bank of England has said.
In a knife-edge vote, policymakers voted 5-4 in favour to lower rates from 4% reflecting concerns over rising unemployment and weak economic growth.
The Bank said rates were “likely to continue on a gradual downward path”, but warned judgements on further cuts next year would more contested.
Inflation is now expected to fall “closer to 2%” – the Bank’s target – next year, which is sooner than previous forecasts. However, the economy is predicted to see zero growth in the final few months of this year.
The decision to lower borrowing costs from 4% was widely expected, after figures this week showed inflation, the rate prices rise at, slowed further to 3.2% in the year to November.
“We still think rates are on a gradual path downward but with every cut we make, how much further we go becomes a closer call,” said the Bank’s governor, Andrew Bailey.
While the cut is likely to be good news for people looking to borrow cash or secure a mortgage, savers could see a reduction on their returns.
About 500,000 homeowners have a mortgage that “tracks” the Bank of England’s rate, and Thursday’s cut is likely to mean a typical reduction of £29 in monthly repayments.
Homeowners on standard variable rates are also likely to see lower payments, although the vast majority of mortgage customers have fixed-rate deals so are not affected by the latest decision.
The Bank said that, following the tax and spending policies announced in last month’s Budget and easing oil and gas prices, inflation was likely to fall close to 2% in the spring/summer of next year. Previously it did not expect this to happen until 2027.
Chancellor Rachel Reeves announced the government would cut £150 off household energy bills in the Budget, as well as freeze fuel duty and rail fares.
However, the Bank said weaker economic growth in November had led it to expect zero growth for the final few months of this year.
It said information gathered from businesses around the country suggested a “lacklustre economy”, with firms concerned by the speculation ahead of the Budget.
The Bank said consumers remained “cautious and keenly focused on value for money”, adding that food shops were “smaller than usual”.
“Some supermarkets have been concerned that the Budget will dampen spending on Christmas food and drink, but discounters say that early sales of lowered priced seasonal food are solid so far,” it added.
Latest figures showed the price of food was the main driver behind November’s drop in inflation.
The inflation rate has fallen in recent months, but this drop does not mean that prices are falling, rather they are rising at a slower rate.
Mr Bailey reiterated that the Bank believed inflation had passed its peak.
Reacting to the Bank’s decision, the chancellor said it was the “sixth interest rate cut since the election – that’s the fastest pace of cuts in 17 years, good news for families with mortgages and businesses with loans”.
But shadow chancellor Mel Stride said while lower interest rates would be “welcome news for many families”, the cut reflected “growing concerns about the weakness of our economy”.
“The economic mismanagement of Rachel Reeves has left the Bank of England with an impossible dilemma, balancing high inflation against a fragile economy.”
EPAThe Bank, which is independent of the government, sets interest rates in an attempt to try to keep consumer price rises under control.
The theory behind increasing interest rates to tackle inflation is that by making borrowing more expensive, more people will cut back on spending and that leads to demand for goods falling and price rises easing.
But it is a balancing act, as high interest rates can harm the economy as businesses hold off from investing in production and jobs.
The government has made growing the economy its main priority as part of its efforts to boost living standards.
In its most recent Monetary Policy Report, the Bank predicted UK economic growth would be 1.5% this year, but forecast it would fall to 1.2% next year before rising to 1.6% in 2027 and 1.8% in 2028.
Get our flagship newsletter with all the headlines you need to start the day. Sign up here.
A shopper carries Nike bags in San Francisco, California, US, on Wednesday, Dec. 17, 2025.
David Paul Morris | Bloomberg | Getty Images
Nike on Thursday posted quarterly earnings and revenue that topped Wall Street’s estimates, as strength in North America helped to offset a plunge in China sales.
The company’s stock slid more than 6% in extended trading Thursday, as investors digested the weakness in China and the sustained hit Nike is taking from higher tariffs.
Here’s what Nike reported for its second fiscal quarter of 2026, according to consensus estimates from LSEG:
- Earnings per share: 53 cents vs. 38 cents expected
- Revenue: $12.43 billion vs. $12.22 billion expected
The athletic apparel retailer said sales in North America rose 9% to $5.63 billion. But revenue in its Greater China market dropped 17% to $1.42 billion.
The sneaker company is just over a year into CEO Elliott Hill’s turnaround strategy, focusing on regaining its growth and market share, clearing out old inventory and investing in wholesale relationships.
“Fiscal year ’26 continues to be a year of taking action to rightsize our classics business, return Nike digital to a premium experience, diversify our product portfolio, deepen our consumer connection, strengthen our partner relationships and realign our teams and leadership,” Hill said on a call with analysts. “And I say we’re in the middle inning of our comeback.”
“We’re nowhere near our potential,” he added.
Hill said Nike’s improvements in its China market are “not happening at the level or the pace we need to drive wider change,” though he said the country remains one of the company’s most powerful long-term opportunities.
Nike expects fiscal third quarter revenues to fall by a low single digit percentage, with modest growth in North America. It also anticipates gross margins will drop 1.75 to 2.25 percentage points – including a 3.15 percentage point hit from tariffs.
The company said wholesale revenues climbed 8% to $7.5 billion during the quarter. But direct sales — which were a focus for Nike in the years before Hill took over and moved away from the strategy — fell 8% to $4.6 billion.
Nike has also been feeling the impact of tariff increases. It said Thursday that its gross margin decreased by 3 percentage points and inventories dropped 3% primarily due to higher tariffs.
The sneaker company has been reporting weakness in its Converse brand, too. In its first fiscal quarter, Nike said Converse sales dropped 27% – on Thursday, it reported a 30% drop in revenues for the sneaker brand.
Despite the weakness in some parts of Nike’s business, the company highlighted some areas of strength and new initiatives ahead. CFO Matt Friend said on the call that Nike.com posted its best Black Friday ever this year, partially driven by its Air Jordan “Black Cat” launch.
Nike also plans to launch a new footwear platform in January called Nike Mind, which aims to help athletes prepare for performance and competition, Hill said on the call.
Nike has been making larger internal changes under Hill.
Earlier this month, Nike underwent leadership changes to “remove layers,” according to Hill. Under its “Win Now” strategy, the company announced that Chief Commercial Officer Craig Williams would leave the sneaker giant.
Hill called the shakeup a move “about growth and offense.”
“Collectively, these changes amount to us eliminating layers and better positioning Nike to continue to have an impact the way only Nike can,” Hill said in a statement at the time.
Nike shares have dropped more than 13% this year as of Thursday’s close.
U.S. President Donald Trump sits in the Oval Office to sign executive orders, at the White House in Washington, D.C., U.S., Dec. 18, 2025.
Evelyn Hockstein | Reuters
President Donald Trump signed an executive order Thursday directing federal agencies to reclassify marijuana, loosening long-standing restrictions on the drug and marking the most consequential shift in U.S. cannabis policy in more than half a century.
The order, once finalized by the Drug Enforcement Administration, moves cannabis out of Schedule I classification — the most restrictive category under the Controlled Substances Act, alongside heroin and LSD — to a Schedule III classification, which encompasses substances with accepted medical use and a lower potential for abuse, such as ketamine and Tylenol with codeine.
“This action has been requested by American patients suffering from extreme pain, incurable diseases, aggressive cancers, seizure disorders, neurological problems and more, including numerous veterans with service-related injuries, and older Americans who live with chronic medical problems that severely degrade their quality of life,” Trump said from the Oval Office on Thursday.
Also on Thursday, the Centers for Medicare and Medicaid Services, led by Dr. Mehmet Oz, is expected to launch a pilot program in April enabling certain Medicare-covered seniors to receive free, doctor-recommended CBD products, which must comply with all local and state laws on quality and safety, according to senior White House officials. The products must also come from a legally compliant source and undergo third-party testing for CBD levels and contaminants.
Shares of cannabis conglomerates were down following the announcement, likely from worries of new compeititon from international companies.
Trulieve’s stock finished the day down about 23%, Green Thumb Industries fell more than 16% and Tilray Brands fell about about 4% as of close on Thursday. The AdvisorShares Pure US Cannabis ETF, which tracks American operators, slid almost 27%.
“Millions of registered patients across the United States, many of them veterans, rely on cannabis for relief from chronic and debilitating symptoms. We commend the administration for taking this historic step. This is only the beginning,” Ben Kovler, founder and CEO of Green Thumb, said in a statement to CNBC.
The reclassification is viewed by many analysts as a financial lifeline for the cannabis industry. The move exempts companies from IRS Code Section 280E, allowing them to deduct standard expenses like rent and payroll for the first time. It also opens the door for banking access and institutional capital previously sidelined by compliance fears.
Many on Wall Street also expect the changes and the Medicare pilot to draw major pharmaceutical players into the sector to chase federally insured revenue.
While CBD has surged in popularity in recent years, with infused consumer goods ranging from seltzers to skin care, the Food and Drug Administration has stopped short of granting the compound its full backing.
Studies have found “inconsistent benefits” for targeted conditions, while FDA-funded research warns that prolonged CBD use can cause liver toxicity and interfere with other lifesaving medications.
Currently, the FDA has only approved one CBD-based drug, Epidiolex, for rare forms of epilepsy.
“I want to emphasize that the order … doesn’t legalize marijuana in any way, shape or form, and in no way sanctions its use as a recreational drug,” Trump said.
Experts and industry insiders told CNBC this week that a reclassification could pave the way for more research into the effects of CBD use.
NEW DELHI: The new nuclear energy bill, which was passed in Rajya Sabha by voice vote after a four-hour discussion while rejecting many amendments moved by opposition to send it to a parliamentary panel for scrutiny, marks a decisive shift in India’s nuclear governance, embedding safety oversight in law across the lifecycle of an atomic plant, unlike the existing framework that relied largely on executive discretion and post-accident accountability.Sustainable Harnessing of Nuclear Energy for Transforming India (SHANTI) Bill will allow private participation in India’s tightly controlled civil nuclear sector as the country seeks to meet its clean energy goals by 2047. As opposition raised safety and liability concerns, officials said it establishes a statutory safety regime that ensures continuous compliance rather than reliance on one-time permissions. It seeks to provide for a “pragmatic civil liability regime for nuclear damage and confer statutory status to Atomic Energy Regulatory Board (AERB)”.Officials said unlike the previous law – in which nuclear safety oversight was shaped largely by broad executive authority and administrative rules – SHANTI fundamentally recasts the framework by shifting to a “statutory, lifecycle-based regulatory regime”. Govt manages radiation risks and radioactive waste, but does not mandate separate safety authorisations or legally bind safety obligations to each phase of a nuclear plant’s life. AERB’s stage-wise consent process for construction, commissioning and operation existed only as an administrative practice. Civil Liability for Nuclear Damage (CLND) Act, 2010 further reinforced a post-accident approach by focusing on compensation and insurance rather than prevention.“These laws (Atomic Energy Act and CLND Act) treated safety primarily as a post-damage responsibility, rather than a proactive governance requirement,” said an official. SHANTI separates “permission to operate” from “permission to operate safely”, requiring both a licence and an independent safety authorisation. Any activity involving radiation exposure risk – including construction, operation, transport, storage, decommissioning, or waste management – will now require explicit safety approval.It also consolidates regulation, enforcement, civil liability and dispute resolution within a single statute, reducing legal complexity and compliance uncertainty. “It grants a clear statutory authority to AERB to inspect facilities, investigate incidents, issue binding directions, and suspend or cancel operations that do not meet safety standards. Regulatory action is no longer dependent on executive discretion. Accident prevention is significantly enhanced by legally recognising serious risk situations as nuclear incidents, even without actual damage,” said the official. Core functions such as fuel enrichment, spent-fuel reprocessing, and heavy water production will remain exclusively under Centre’s control.Anujesh Dwivedi, partner at Deloitte India, said continuing with the existing legal framework would make it difficult for nuclear energy to replace thermal power in the long run. “Over decades, India added only about 8GW of nuclear capacity. Scaling this up to 100GW by 2047- and potentially 300GW or more by 2070 – required major reforms, which these regulations seek to address,” he said.Meanwhile, PM Modi said passing of the bill marks a “transformational moment for our technology landscape”.
Ex-NASCAR star Greg Biffle, family members killed in North Carolina plane crash
Victoria Beckham ‘won’t let family feud ruin Christmas’
Violence erupts in Bangladesh after wounded youth leader dies
-
Business5 days agoHitting The ‘High Notes’ In Ties: Nepal Set To Lift Ban On Indian Bills Above ₹100
-
Politics1 week agoTrump launches gold card programme for expedited visas with a $1m price tag
-
Business1 week agoRivian turns to AI, autonomy to woo investors as EV sales stall
-
Sports1 week agoPolice detain Michigan head football coach Sherrone Moore after firing, salacious details emerge: report
-
Fashion1 week agoTommy Hilfiger appoints Sergio Pérez as global menswear ambassador
-
Business1 week agoCoca-Cola taps COO Henrique Braun to replace James Quincey as CEO in 2026
-
Sports1 week agoU.S. House passes bill to combat stadium drones
-
Tech1 week agoGoogle DeepMind partners with UK government to deliver AI | Computer Weekly