BoE’s Breeden: US tariffs are the biggest change in trade policy
|Bank of England (BoE) Deputy Governor Sarah Breeden gave her views on the recently announced United States (US) tariffs and their potential economic impact.
Key Quotes
- Latest developments have a material impact on economic outlook and risks.
- World has moved on significantly since March MPC meeting.
- US tariffs are biggest change in trade policy in a century.
- Very unclear what overall landscape will be for tariffs in medium term.
- Overall tariffs are likely to lower UK growth.
- Impact on inflation from US tariffs not clear cut.
- So far Sterling has not weakened due to tariffs, this could change.
- Too early to call overall impact on inflation for UK and hence appropriate monetary response to tariffs.
- Government bond yields have been volatile.
- We judge the risk of a further sharp correction to risky asset prices remains high.
- The UK banking system will still have capacity to support the economy even if conditions worsen substantially.
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