By Paul Hannon
The Bank of England will need to see the details of President-elect Donald Trump's new tariffs before drawing firm conclusions about their impact on the U.K., Governor Andrew Bailey told lawmakers Tuesday.
Trump said he wants to raise tariffs on imports from a wide range of countries, although the details are unclear.
"I'm very cautious about jumping to conclusions," Bailey said.
He said the central bank would need to know what goods the tariffs were levied on, what the response of other countries would be, and how currencies responded before being able to assess their impact.
However, he said higher barriers to trade would weaken world economic growth.
"Fragmenting the world economy is not a good thing," he said.
Bailey said the U.K. government should engage in an active dialogue with the new administration on trade, and that it should take the same approach to the European Union.
The BOE cut its key rate for a second time in 2024 earlier this month, but said further reductions in borrowing costs would be gradual.
Also speaking to lawmakers, Alan Taylor said a gradual pace would involve a cumulative reduction in the key rate of one percentage point in 2025. But he said the BOE might move more quickly if there are signs that inflation is cooling more rapidly than policymakers expect.
"If conditions are weaker, and my own view is skewed to the downside, then we could go faster," he said.
Taylor is the most recent recruit to the BOE's Monetary Policy Committee, having joined in September.
Write to Paul Hannon at paul.hannon@wsj.com
(END) Dow Jones Newswires
November 19, 2024 06:39 ET (11:39 GMT)
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