Andrew Bailey, the Bank of England governor, stated that despite the UK’s trade agreement with the US, tariffs remain higher than before Donald Trump came to power, contributing to global trade uncertainty that impacts UK interest rates. He conveyed his concerns to the Treasury select committee.
Bailey explained that the established pattern of trade agreements, which led to lower tariffs, has been “blown up” to a considerable degree, having “very serious consequences for the global economy.” This disruption is causing businesses in the UK to delay investment.
Nevertheless, the governor still anticipates a decline in UK wage growth in the coming months, which could provide the Monetary Policy Committee with more confidence to cut rates. He projected wage settlements to be around 3.7% to 3.8% by the end of the year.
Bank of England Governor: Tariffs Higher Than Pre-Trump Era
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