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Andrew Bailey, governor of the Bank of England (BOE), during the Monetary Policy Report news conference at the bank's headquarters in the City of London, UK, on Thursday, Nov. 2, 2023. The Bank of England left its benchmark lending rate at a 15-year high, ruling out any possibility of letting up on its fight against inflation for the foreseeable future. Photographer: Hollie Adams/Bloomberg via Getty Images
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The Bank of England is focused on the potential U.K. growth shock from U.S. tariffs if there is a slowdown in global trade, the central bank's governor Andrew Bailey said Thursday.
"We're certainly quite focused on the growth shock," Bailey told CNBC's Sara Eisen in an interview at the IMF-World Bank Spring Meetings.
Bailey added that he did not see the U.K. as being close to a recession at present.
The IMF earlier this week downgraded its 2025 growth forecast for the U.K. to 1.1% from 1.6%, citing the impact of U.S. President Donald Trump's trade tariffs, higher borrowing costs and increased energy prices.
However, economic forecasting remains mired in uncertainty as countries engage in negotiations with U.S. officials over Trump's swingeing universal tariff policy, currently on pause. The U.S. has imposed 25% tariffs on steel, aluminum and autos and a 10% levy on other British exports.
U.K. policymakers have expressed hopes of reaching a trade deal with the White House, with U.S. Vice President J. D. Vance saying there is a "good chance" of an agreement.
The Bank of England held interest rates at 4.5% at its March meeting, before Trump shocked the world with the scale of his tariff announcement.
Markets now see the BOE slashing rates to 4% by its August meeting as it grapples with a weaker growth outlook, along with a slowdown in inflation.
This is a breaking news story and will be updated shortly.
English (US)