US interest rates held after inflation fell to less than half UK’s rate
The Federal Reserve, which is the US central bank, has held interest rates after 10 consecutive rises.
The decision was announced a day after official figures showed US inflation was 4% – less than half the UK’s current level of 8.7%.
Latest data from the Bureau of Labor Statistics said prices rose 4% in May, the lowest pace of increases in more than two years.
Following the Fed’s announcement, US interest rates will continue to be at 5% to 5.25%, a high not previously seen since 2007.
The Fed had been increasing rates in an effort to dampen economic activity and bring price rises down to the regulator’s 2% target.
In the UK, however, inflation stood at 8.7% in April.
The slow reduction from double digit inflation and a labour market with low unemployment and rising wages has led to market expectations that the Bank of England will hike the interest rate to 5.75%.
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The Bank of England in May raised its base rate up 0.25 percentage points to 4.5%.
That expected increase has led to banks and building societies increasing their mortgage rates and pulling some mortgage products from the market in preparation for higher rates.
New information about inflation in the UK will be released by the Office for National Statistics (ONS) next Wednesday.
In the US, the interest rate is a range, rather than a single percentage – unlike the UK – because the Fed is not permitted to set a specific figure. The figures are a target rate, set to guide lenders.
Once again the Fed said the US banking system is “sound and resilient”.
“Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain,” it added.
Further rises were not ruled out.
“In determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time, the [rate-setting federal open market] committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” the committee said.
A case of the flesh-eating screwworm parasite has been detected in a person in the United States for the first time.
The parasitic flies eat cattle and other warm-blooded animals alive, with an outbreak beginning in Central America and southern Mexico late last year.
It is ultimately fatal if left untreated.
The case in the US was identified in a person from Maryland who had travelled from Guatemala.
Beth Thompson, South Dakota’s state veterinarian, told Reuters on Sunday that she was notified of the case within the
last week.
A Maryland state government official also confirmed the case.
The person was treated and prevention measures were implemented, Reuters reports.
The Centres for Disease Control and Prevention (CDC) and the Maryland Department of Health did not immediately respond to requests for comment.
What is screwworm?
The female screwworm fly lays eggs in the wounds of warm-blooded animals and once hatched, hundreds of screwworm larvae use their sharp mouths to burrow through living flesh.
It can be devastating in cattle and wildlife, and has also been known to infect humans.
Treatment is onerous, and involves removing hundreds of larvae and thoroughly disinfecting wounds. They are largely survivable if treated early enough.
The confirmed case is likely to rattle the beef and cattle futures market, which has seen record-high prices because of tight supplies.
The US typically imports more than a million cattle from Mexico each year to process into beef. The screwworm outbreak could cost Texas – the biggest cattle-producing state – $1.8bn (£1.3bn) in livestock deaths, labour costs and medication
expenses.
A view shows a calf after being sprayed with a disinfectant spray to prevent screwworm. Pic: Reuters
The United States Department of Agriculture (USDA) has set traps and sent mounted officers along the border, but it has faced criticism from some cattle producers and market analysts for not acting faster to pursue increased fly production via a sterile fly facility.
What is a sterile fly facility?
The case also comes just one week after the US agriculture secretary, Brooke Rollins, travelled to Texas to announce plans to build a sterile fly facility there in a bid to combat the pest. Ms Rollins had pledged repeatedly to keep screwworm out of the country.
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A sterile fly facility produces a large number of male flies and sterilises them – these males are then released to mate with wild female insects, which collapses the wild population over time. This method eradicated screwworm from the US in the 1960s.
Mexico has also taken efforts to limit the spread of the pest, which can kill livestock within weeks if not treated. It had started to build a $51m sterile fly production facility.
The USDA has previously said 500 million flies would need to be released weekly to push the fly back to the Darien Gap, the stretch of rainforest between Panama and Colombia.
National Guard troops deployed to Washington DC in an effort to mitigate crime will begin carrying firearms, an official has said.
Defence secretary Pete Hegseth ordered the authorisation of roughly 2,000 National Guard troops to begin carrying weapons.
The majority of the guard members will carry M17 pistols, their service-issued weapons, while a small number will be armed with M4 rifles, reports Sky’s US partner organisation, NBC News.
The troops are authorised to use their weapons for self-protection.
A White House official told NBC News that despite being armed, as of Saturday night, the National Guard troops in DC are not making arrests, and will continue to work on protecting federal assets.
The troops were largely deployed from outside the state and were framed by President Trump as a concerted effort to tackle crime and homelessness in the nation’s capital.
Such deployments are not common, and are typically used in response natural disasters or civil unrest.
Democrats have bashed the deployment as partisan in nature, accusing Mr Trump of trying to exert his presidential authority through scare tactics and said his primary targets have been cities with black leadership.
Armed members of the South Carolina National Guard patrol outside of Union Station. Pic: AP
Pentagon plans to deploy US army to Chicago
Yesterday it was reported that the Pentagon was drafting plans to deploy the US army in Chicago, the largest city in the state.
The governor of Illinois then accused Mr Trump of “attempting to manufacture a crisis” and “abusing his power to distract from the pain he is causing working families”.
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Officials familiar with the proposals told the Washington Post that several options were being weighed up by the US defence department, including mobilising thousands of National Guard troops in Chicago as early as September.
Mr Trump had told reporters on Friday that “Chicago is a mess”, before attacking the city’s mayor, Brandon Johnson, and hinting “we’ll straighten that one out probably next”.
The governor of Illinois has accused Donald Trump of “attempting to manufacture a crisis” over reports the US president was considering deploying the military in the state.
US newspaper The Washington Post reported on Saturday that the Pentagon was drafting plans to deploy the US army in Chicago, the state capital.
It comes as part of Mr Trump’s crackdown on crime, homelessness, and illegal immigration in mainly Democrat-run cities. He recently deployed the National Guard in Washington DC.
In a statement responding to the report, governor JB Pritzker said Illinois had “received no requests or outreach from the federal government asking if we need assistance, and we have made no requests for federal intervention”.
He added: “The safety of the people of Illinois is always my top priority.
“There is no emergency that warrants the President of the United States federalising the Illinois National Guard, deploying the National Guard from other states, or sending active duty military within our own borders.”
The governor then said: “Donald Trump is attempting to manufacture a crisis, politicise Americans who serve in uniform, and continue abusing his power to distract from the pain he is causing working families.
“We will continue to follow the law, stand up for the sovereignty of our state, and protect the people of Illinois.”
Officials familiar with the proposals told the Post that several options were being weighed up by the US defence department, including mobilising thousands of National Guard troops in Chicago as early as September.
The Pentagon said it would not comment on planned operations, adding: “The department is a planning organisation and is continuously working with other agency partners on plans to protect federal assets and personnel.”
People protest against President Donald Trump’s use of federal law enforcement and National Guard troops in Washington DC. Pic: AP
Mr Trump, however, told reporters on Friday that “Chicago is a mess,” before attacking the city’s mayor Brandon Johnson and hinting “we’ll straighten that one out probably next”.
Mr Johnson has not yet commented on Saturday’s reports, but said on Friday that the president’s approach to tackling crime has been “uncoordinated, uncalled for and unsound”.
“There are many things the federal government could do to help us reduce crime and violence in Chicago, but sending in the military is not one of them,” he added.
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It comes after around 800 National Guard troops were deployed in Washington DC earlier this month, despite the US capital’s mayor revealing crime in the capital was at its “lowest level in 30 years”.
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What’s it like having the army on DC’s streets?
According to preliminary figures from Washington DC’s Metropolitan Police, violent crime is down 26% in 2025 – after dropping 35% in 2024 compared with 2023.
In June Mr Trump ordered 700 US Army marines and 4,000 National Guard troops to Los Angeles in California, during protests over mass immigration raids.
The deployment came against the wishes of state governor Gavin Newsom, who said: “The federal government is sowing chaos so they can have an excuse to escalate.
“That is not the way any civilised country behaves.”
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