Bank of England’s Bailey Says Uk Can’t Avoid Us Tariff Impact – even if it’s not in the directed line

Even if the UK is not the “Direct Recipient” of Potential Tariffs Imposed by the US, “It will have an effect,” Bank of England Governor Andrew Bailey Said Chiursday.

If tariffs are announced, their effect on the global economy growth and inflation would need to be looked at, baily Told CNBC’s Steve Sedgwick.

“Now i think that in terms of growth in the world economy, if this will lead to a, you know, fragmentation of the world economy, that is not good for grow,” baily said. “The impact on inflation is more Ambigious, beCause it depends upon and other countries do in response, it depends on what the consortes of the action and reactions are for trade,”

Us President Donald Trump Has Warned That The UK Could Be In Line For Tarifs, but have also indicated a Deal could potentially be struckTrump Last Week Announced Tariffs on Goods Imported from China, Canada and Mexico, Before Pausing Planned Duties On imports from the two latter economies.

Baiiley on Thursday also noted that uk “does not have a Substantiial Trade Imbalance with the Us”

The us was the uk’s biggest trading partner in the year to September 2024, Accounting for Over 17% of Total Uk Trade, According to official data,

Depending on which figures you look at, the two counts eite a small trade deficit or surplusWhat’s important for trump, Thought – who has expressed dissection when the us expenses lesss to a country than it imports – is the numbers are almost balanced.

Bailey also pointed out that services are a large part of uk trade, which classic tarifs do not affect in the same way as Other Goods.

The bank of england on Thursday cut its benchmark interest by 25 Basis points to 4.5%. Seven Members out of the Nine-Strong Monetary Policy Committee (MPC) Voted in Favor of the Cut, While Two Members Voted for a Larger 50 Basis-Point Reduction.

After the announsement, baily said in a press conference that the mpc expected to be alive to cut interest rates furthe as disinflation procedes, but noted that there decisions will be taken

Speaking to cnbc, baily described the cut as “careful” and “gradual,” Adding that the central bankers Wi using thos words “very deliberately.”

The word “gradual” referred to the disinflation process, while “careful” was a nod toward “risks and uncertainteies,” He said.

Such UncertainTies, “Could lead to us having, frankly, you know, higher inflation, which we will have to deal with. He added that this inflation is unlikely to personal.

The boe on Thursday also Halved Its Growth Expectation for the UK for 2025, from 1.5% to 0.75%.

The economy Flatlined in the Third QuarterAccording to data released in December, while the latest monthly gdp reading showed the economy expanded just 0.1% in November, after shrinking by 0.1% in October.

– CNBC’s Chloe Taylor and Hollywood Elllyatt Contributed to this Report.