The Bank of England is taking very seriously the risk to economic growth from the upheaval in global trade, Governor Andrew Bailey said on Wednesday, two weeks before the BoE’s next interest rate decision and its latest economic forecasts.
Bailey, speaking on the sidelines of the International Monetary Fund’s spring meetings that have been dominated by U.S. President Donald Trump’s trade tariffs, said Britain stood to be hit by the global disruption as an open economy.
Bailey pointed to the IMF’s sharp downgrade of its forecasts for economic growth in 2025 – both globally and in the UK – which were published on Tuesday.
“We do have to take very seriously the risk to growth,” Bailey told an event organised by the Institute of International Finance when asked how much the BoE had to consider the effects of U.S. President Donald Trump’s tariff and trade policy.
“We’re currently working through that because we’ve got an interest rate decision coming in two weeks’ time,” Bailey said.
Investors on Wednesday assigned a 100% probability to the BoE cutting rates by a quarter of a percentage point on May 8 after the next scheduled Monetary Policy Committee meeting.
Asked about global banking rules, Bailey stressed the importance of the United States backing the so-called Basel bank capital regulations.
The U.S. banking industry is seeking a further relaxation of rules on the sector after it secured a watering down of the regulation under the administration of Joe Biden.
The BoE in January delayed implementing the Basel rules by a year to January 2027 to get clarity on what the United States will do and the European Union is considering its next moves.
“It’s important to give the U.S. time to decide how it’s going to reframe its Basel implementation, because we want to go ahead together,” he said. “I think it’s important that we maintain the playing field.”
(Reporting by William Schomberg）
