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Good morning. Today we're talking about a new UK/US trade deal, falling interest rates and a weight loss firm in trouble.

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Big Stories

UK/US trade deal

President Trump has announced a preliminary trade agreement with the UK, the first since the US implemented sweeping tariffs last month. While details remain sparse, the deal appears to offer the UK some concessions, including a lower 10% tariff cap on 100,000 car exports to the US, a significant reduction from the potential 27.5%. Additionally, tariffs on Rolls-Royce engines and plane parts will be eliminated, and the UK government stated that US tariffs on steel and aluminum imports from Britain will also be scrapped. In return, the UK will streamline customs processes and reduce non-tariff barriers, opening its markets to more US agricultural products, chemicals, and machinery. The agreement's broader implications are still unclear, with no specifics released regarding sectors like pharmaceuticals or advanced technology. Analysts note the UK already runs a trade deficit with the US and did not implement retaliatory tariffs, potentially contributing to the favourable terms. This initial deal could serve as a blueprint for future trade negotiations with other US partners, suggesting a pattern of limited tariff reductions in exchange for increased US market access, with a baseline 10% universal tariff likely remaining.

Rate cuts continue

The Bank of England announced an interest rate cut of 0.25 percentage points to 4.25%. This marks the fourth such reduction in the past year, with the Bank reportedly considering a more significant 0.50 percentage point decrease to 4.0% amid concerns that the escalating global trade war could negatively impact UK economic growth. The cut reflects the Bank’s assessment of easing inflationary pressures, with inflation falling to 2.6% in March. While a temporary rise in inflation is expected later in the year due to earlier energy price increases, the Bank anticipates a further decline thereafter. The decision also acknowledges the slowing UK GDP growth since mid-2024 and a loosening labour market. Despite this initial easing, the Bank emphasised a cautious and data-dependent approach to future monetary policy adjustments. It will closely monitor evolving economic indicators and global uncertainties, particularly the impact of new US tariffs. The Bank reiterated its commitment to sustainably returning inflation to its 2% target, with future policy decisions contingent on emerging risks and inflation dynamics. Financial markets currently anticipate at least two further quarter-point cuts in borrowing costs this year, although the Bank's own forecasts suggest inflation is unlikely to ease to the 2% target until the spring of 2027.

Weightwatchers files for bankruptcy

WeightWatchers (WW), the 62-year-old program that revolutionised dieting, has filed for Chapter 11 bankruptcy in the US. This move aims to eliminate its $1.2bn debt and facilitate a repositioning in the face of a rapidly changing weight management landscape. The company said its operations will continue without disruption for its 3m members globally. WW, once known for in-person meetings and its points-based portion control system, had pivoted towards a telehealth platform, "WeightWatchers Clinic," connecting patients with doctors who could prescribe weight-loss and diabetes medications. This represented a radical shift for the company. However, this pivot, despite showing some growth in clinical subscription revenue, did not fully offset declining subscriber numbers and increasing competition from popular weight-loss drugs, leading to a significant drop in its stock value. During the bankruptcy process, WW anticipates a swift reorganisation, expecting to emerge as a publicly traded company within approximately 40 days. The company believes this restructuring will provide the financial flexibility needed to accelerate innovation and reinvest in its members for long-term success in the evolving weight management market.

Elsewhere...

New deal: The UK and India have agreed a trade deal to make it cheaper and easier to buy and sell goods and services to one another.

Takeaway takeover: The food delivery company Deliveroo has agreed a £2.9bn takeover by its US rival DoorDash that will result in a near-£66m payday for its staff.

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Number of the Day

$200 billion

How much Bill Gates will donate to charity through his Gates Foundation over the next 20 years, virtually all of the billionaire Microsoft founder’s fortune.

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