Bank of England Governor Andrew Bailey stopped before the start of the monetary policy report press conference held by the Bank of England in London, England on February 6, 2025.
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Even if the UK is not a “direct recipient” of potential tariffs imposed by the U.S., it will be effective,” Bank of England governor Andrew Bailey said Thursday.
Bailey told CNBC’s Steve Sedgwick that if tariffs were announced, they need to be studied for their impact on global economic growth and inflation.
“Now, I think, in terms of growth in the world economy, if that will lead to a dispersion of the world economy, it is not good for growth,” Bailey said. He added: “The impact on inflation is more ambiguous because it depends on The responses of other countries depend on the consequences of these actions and reactions being traded.”
U.S. President Donald Trump warns that Britain may impose tariffs, but also indicates The deal could be hit. Trump announced tariffs on goods imported from China, Canada and Mexico last week, after Responsibilities for suspending the plan About imports from the latter economy.
Bailey also noted on Thursday that Britain has “no significant trade imbalance with the United States”
As of September 2024, the United States is the UK’s largest trading partner, accounting for more than 17% of the UK’s total trade. Official data.
According to what numbers you see, the two countries either have a small amount of transactions deficit or Remaining. However, it is important for Trump that he expressed dissatisfaction when the United States exported less than imports to a country – the numbers were almost balanced.
Bailey also pointed out that services are a large part of UK trade, and that classic tariffs do not have the same impact as other commodities.
A “gradual” and “cautious” BOE decision
The Bank of England cut its benchmark interest rate by 25 basis points to 4.5% on Thursday. Of the nine Monetary Policy Committees (MPCs), seven members voted for the cut, while two members voted for the cut by 50 benchmark points.
After the announcement, Bailey said at a press conference that the MPC expected to be able to further reduce interest rates as the dissolution proceeded, but pointed out that the decisions would be made on the basis of the meeting.
Bailey described the cuts as “cautious” and “gradual” when he accepted CNBC’s speech, adding that the central bank uses the words “very intentional.”
He said the word “gradual” refers to the dissolution process, while “caution” is a nod to “risk and uncertainty.”
Such uncertainty, “Frankly, we know that we will have to deal with higher inflation. We will increase this growth in inflation.” He added that this inflation is unlikely to last .
Thursday’s BOE also halved its growth forecast for the UK in 2025, from 1.5% to 0.75%.
economy Flat in the third quarteralthough the latest monthly GDP reading shows that the economy rose by only 0.1% in November, according to data released in December.
– Chloe Taylor and Holly Ellyatt of CNBC contributed to the report.
