The US central bank has cut interest rates for the first time this year, in a move president Donald Trump will likely declare is long overdue.

Mr Trump has demanded cuts to borrowing costs from the Federal Reserve ever since worries emerged in the world’s largest economy that his trade war would stoke US inflation.

The president – currently in the UK on a state visit – has, on several occasions, threatened to fire the Fed chair Jay Powell and moved to place his own supporters on the bank’s voting panel.

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He was yet to comment on the rate decision.

The fallout from the row has resonated globally, sparking worries about central bank independence. Financial markets have also reflected those concerns.

The bank, which has a dual mandate to keep inflation steady and maintain maximum employment, made its move on Wednesday after a major slowdown in the employment market that has seen hiring ease sharply.

The latest economic indicators have shown caution over spending among both companies and consumers alike.

The Fed said the economy had moderated.

Inflation, while somewhat elevated due to the effects of higher import costs from the trade war, has not taken off as badly as some economists, and the Fed, had initially feared.

Its 12-member panel backed a quarter point reduction in the Fed funds rate to a new range of between 4% to 4.25%.

The effective interest rate is in the middle of that range.

Crucially for Mr Trump, who is trying to inspire growth in the economy, the Fed signalled more reductions ahead despite continued concern over inflation.

Financial markets saw a further two quarter point rate cuts before the year’s end.

The dollar, which has weakened in recent days on the back of expectations of further rate cuts, fell in the wake of the decision and the Fed’s statement.

It was trading down against both the euro and pound. Sterling was almost half a cent up at $1.17.

This Fed meeting was the first with new Trump appointee Stephen Miran on the voting panel.

He was chairman of the president’s Council of Economic Advisers before being handed the role this week.

His was a sole voice in the voting for a half percentage point cut. It is clear, though the identity of participants’ forecasts are not revealed, he was the lone voice in calling for a further five quarter point reductions this year.

Mr Trump has sought to fire a member of the Fed’s board, Lisa Cook, to bolster his position further but that decision is currently subject to a legal challenge.

Inflation has remained relatively high, meaning goods are becoming more expensive, official figures show.

The rate of price rises remained at 3.8% in August, according to data from the Office for National Statistics (ONS).

Prices are expected to continue to rise, with the Bank of England forecasting the rate will hit 4% in September.

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Some of the biggest US technology companies have pledged billions of pounds of investment to turbocharge Britain’s artificial intelligence (AI) industry, as the two countries announce a landmark technology deal.

Nvidia, Microsoft, Open AI and Google made a flurry of announcements to coincide with President Trump‘s state visit to the UK.

They include plans to build data centres and invest in AI research and engineering.

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Sir Keir Starmer described the agreement, which both leaders will sign over the coming days, as “a generational step change” in Britain’s relationship with the US.

The deal will see both countries cooperate on AI, quantum computing and nuclear energy, with investment in modular reactors revealed earlier this week.

The prime minister said it was “shaping the futures of millions of people on both sides of the Atlantic, and delivering growth, security and opportunity up and down the country”.

The government said the deal would deliver thousands of jobs, with a new AI Growth Zone in the North East of England earmarked for 5,000 jobs.

The region will host a new data centre developed in partnership with ChatGPT developer OpenAI, the US chip giant Nvidia and the British data centre company Nscale. The UK government will supply energy for the project, which will be based in Blyth.

Jensen Huang, chief executive of Nvidia, who has previously drawn attention to Britain’s inadequate levels of digital infrastructure, said: “Today marks a historic chapter in US-United Kingdom technology collaboration.

“We are at the Big Bang of the AI era – and the United Kingdom stands in a Goldilocks position, where world-class talent, research and industry converge.”

The Blyth data centre is part of Stargate, Open AI’s infrastructure project to build large data centres across the US.

The company has also developed sites in Norway and the UAE. Nvidia, which provides the graphic processing chips (GPUs), expects to generate $20bn (£14.6bn) by the end of this year from “sovereign” deals with national governments over the coming years.

Sam Altman, OpenAI’s chief executive, said: “The UK has been a longstanding pioneer of AI, and is now home to world-class researchers, millions of ChatGPT users and a government that quickly recognised the potential of this technology.

“Stargate UK builds on this foundation to help accelerate scientific breakthroughs, improve productivity, and drive economic growth.”

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Microsoft also pledged £22bn, its largest ever investment in the UK, to expand data centres and construct the country’s largest AI supercomputer.

Meanwhile, Google owner Alphabet pledged £5bn to expand its data centres in Hertfordshire and fund its London-based subsidiary DeepMind, which uses AI to power cutting edge scientific research. The company was founded in Britain and acquired by Google in 2014.

Other investments include £1.5bn from AI cloud computing company CoreWeave and £1.4bn from Salesforce.