The prices of US President Donald Trump could mean less money in the pockets of British consumers, have warned experts from the Banque d’Engangre.
Prices could achieve growth and pose “substantial” risks for British and global economies, said Bank Governor Andrew Bailey.
His colleagues added that commercial frictions could harm companies in the United Kingdom and elsewhere.
Bailey asked sales disputes to settle worldwide and highlighted the importance of trade.
The United States has increased trade tensions, and this week has imposed new prices for imports from Mexico and Canada, and has doubled the tax on Chinese products.
Addressing deputies of the effects of Trump prices, Bailey said: “The risks to the British economy, and even the world economy, are substantial.”
When asked if Trump’s prices could mean less money in the pockets of British consumers, Bailey said “Yes. We serve people and we have to take it very seriously”.
Megan Greene, a member of the bank’s monetary policy committee, said there was a lack of certainty as to the extent to which the United States will go in the implementation of prices and on the way countries will react.
But prices could affect the British economy in several ways, she said.
If there are prices imposed on British products in the United States, it would exert downward pressure “on the British economy, because companies would find it difficult to sell for American consumers.
But this could also reduce inflation, the rate at which prices are increasing.
If the supply chains have fragmented and were to be reorganized, this would strike the growth of the United Kingdom and push inflation.
“In the end, prices would grow growth,” said Greene, adding that there was a “ton of uncertainty” on how Trump’s prices would take place, but there would probably be more negatives for the United Kingdom the economic activity than positive points.
Professor Alan Taylor, who is also a member of the monetary policy committee, agreed that the risks to the economy prevail over opinions, and that “is true for the people of the country and the world”.
He added: “If you put sand in these wheels (trade), we will be worse on a certain margin.”
Bailey said he had accepted “very strongly” with the assessment of committee members.
“Trade supports growth. Opening supports the spread of innovation and ideas,” he said.
Bailey called for trade disputes to be settled via the World Trade Organization, rather than beaten between the United States and other countries.
Trump and his administration said higher prices on imported goods in the United States will help get better agreements with allies and competitors around the world.
But experts have warned that trade barriers could harm in the United States, triggering higher prices and more inflation, as well as saving in the world.
In addition, Bailey has also warned of risks if the United States leaves institutions such as the International Monetary Fund (IMF) and the World Bank, which lend countries to try to avoid financial crises.
Some Trump’s allies, including key white house staff, previously recommended the withdrawal.
Bailey said this decision would be a “very damaging thing for the world”.
But he said that he had “strongly praised” the new American secretary of the Treasury, Scott Bessent, “believes in multi-lateralism”, or a collectively coordinated action.
