Bank of England (BoE) Governor Andrew Bailey pointed out on Thursday during the press conference following the central bank's monetary policy decision that the institution is unable to predict the impact of the United States' newly imposed tariffs on the British economy due to their "long term effect."
"If there were to be tariffs that contributed to what I would call a sort of fragmentation of the world economy, then that would be negative for the world economy. I hope that doesn't occur," he responded. "Effects on inflation are much more ambiguous because it depends on the reaction of other countries. We can't be clear on the impact on inflation of tariffs because it depends on a lot of things."
When questioned regarding the bank's updated GDP growth projections, which now anticipate a rise of just 0.75% in 2025 compared to the earlier estimate of 1.5%, Bailey clarified that the revision was not connected to the budget. The official stated that in upcoming meetings, the bank will assess whether the underlying inflation pressures are easing enough to allow further rate cuts.
