Business news live: Bank of England reveals tariffs impact on interest rates and Santander to buy TSB

Santander has agreed to buy TSB for £2.65bn, rising to a potential £2.9bn, in a deal which will create the UK’s third-largest bank.

The deal still faces approval but is expected to close in early 2026.

That could mean the disappearance of TSB from the high street after Santander revealed plans to “integrate TSB” into the group.

We may see more of this later on this week as we get closer to tariff deadline day, if that can be a thing.

But Andrew Bailey, governor of the Bank of England, says the uncertainty for businesses over the impact of tariffs mean they are not spending – and keeping interest rates tighter might only exacerbate that.

“We haven’t seen the effects much yet from tariffs and we didn’t expect to by now,” he said – but acknowledged the BoE’s MPC took a “prudent” approach last time out by simply waiting to see and opting against an interest rates cut.

Most analysts expect another 25bps cut in August, taking the base rate to 4.00 per cent.

The FTSE 100 rose 0.28 per cent yesterday after an up-and-down (-and-up-again) day.

Within the index, the biggest gainers were:

• Drinks maker Diageo, up 3.75 per cent
• Pub owner Whitbread, up 3.37 per cent
• Footwear store JD Sports, up 2.88 per cent
• Gold miner Endeavour Mining, up 2.87 per cent.

Two of those were in no small part due to the EU insisting on lower tariffs for alcohol exports to the US in a trade deal and a rising price of gold. Whitbread, meanwhile, have a new significant shareholder who took up a 5 per cent position.

Good morning all and welcome to the Independent’s live blog coverage for Wednesday.

Today we’ll be following up on the latest ISA reform, with both cash and lifetime versions under review, and detailing the latest stock market news after it was reported AstraZeneca could pursue a listing switch to the US.

Additionally we’ve got exclusive news coming on trade tariffs impacting businesses in the UK.

Lots to cover – let’s get into it.