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Bank Governor Andrew Bailey visits the press conference on the Central Bank’s Central Bank’s credit policy in the London city, May 8, 2025.
Carlos Yas | AFP | Gets the image
Bank Governor Andrew Bailey said CNBC on Thursday that the UK was heading to greater economic uncertainty, despite the fact that the country was First launch a trade agreement with the US With the contradictory tariff regime of President Donald Trump.
“The tariff and trade situation introduced more uncertainty in the situation … Now in an interview with CNBC there was more uncertainty than in the past,” Bailey said.
“The Britain and the US trade agreement is very welcome in this sense, very welcome. But the UK is a very open economy,” he continued.
This means that the impact from tariffs on the UK economy comes not only from its own trade relations with Washington, but also from the US and the rest of the world, he said.
“I hope what we see on the Britain’s trading side will become the first of many, and it will happen again by a whole series of trade agreements, but we must see that it happens, of course, and where it actually ends.”
“Because of course, we are considering the level of tariffs that are probably higher than they were in advance.”
In the Bank of England A Monetary Policy Report Released on Thursday, the word “uncertainty” was used 41 times in 97 pages, which is 36 times compared to, CNBC Tally reports.
The Central Bank of UK reduce interest rates On Thursday, a quarter of the interest rate, taking a key rate up to 4.25%. The decision was very divided among seven members of the monetary policy committee, and five voting for 25 basic points, two voting and two voting for a higher 50 basic points.
Bailey said, while some analysts perceived the decision on the rate as a more haystroke than expected – in other words, leaning to raise rates than quickly cut them – he was not surprised by a close vote.
“What it reflects is what there are two sides, there are risks on both sides,” he said CNBC.
“We could get a much more serious demand than we expected, it could go to weaker inflation forecasts than we expected.”
“On the other hand, there is a risk that we could get a certain combination of more persistence in inflation effects that gradually pass through the system,” for example, in wages and energy, while “power power in the economy is weakening,” he said.
