Andrew Bailey, Governor of the Bank of England, stops before the press conference starts from a monetary policy report at the Bank of England on February 6, 2025 in London, England.
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Even if the UK is not a “direct recipient” of the potential tariffs that have imposed the US, “it will have an effect,” England’s Bank Governor Andrew Bailey said on Thursday.
If the announcements of the tariff, their impact on global economic growth and inflation should be observed, said Bailey Steve Sedgwick.
“Now I think that in terms of growth of the world economy, if it will lead to the fragmentation of the world economy, this is not good for growth,” Bailey said. “The influence on inflation is more ambiguous, because it depends on what other countries do in response, it depends on the consequences of these actions and reaction for trade,” he added.
US President Donald Trump warned that the UK could be fine for tariffs but also indicated The contract could be reached. Trump announced last week to the goods imported from China, Canada and Mexico, before Stopping planned duties about imports from the two last economy.
Bailey also noted that the UK “does not have a significant trade imbalance with the US” on Thursday
The United States was the largest shopping partner in the UK in the year to September 2024, which made up more than 17% of the total store in the UK, according to Official data.
Depending on which figures you look at, two countries have a small store deficit or surplus. What is important for Trump – which expressed dissatisfaction when the US exports less to the country than imports – the numbers are almost balanced.
Bailey also pointed out that services are a large part of the UK trade, which classic tariffs do not affect the same way as other goods.
‘Gradual’ and ‘careful’ boe decision
The Bank of England reduced the reference interest rate by 25 base points to 4.5%on Thursday. Seven members from the Committee on Monetary Policy with nine strong monetary policies (MPC) voted to reduce, while two members voted for a larger reduction of 50 basic points.
After the announcement, Bailey said at a press conference that MPC expects to be able to further reduce interest rates that the disinflation has progressed, but noted that those decisions would be made on the meeting at the meeting.
In an interview with CNBC, Bailey described the cut as “carefully” and “gradually”, adding that the central bankers used those words “very intentionally”.
The word “gradually” referred to the disinflation process, while “carefully” with his head towards “risks and insecurities,” he said.
– CNBC -ova Chloe Taylor and Holly Ellyatt contributed to this report.
