UK’s Rate Decisions “Shrouded in Uncertainty” by Global Trade Chaos

The Bank of England’s decisions on future UK interest rates are now “shrouded in a lot more uncertainty” due to the chaotic global trade environment, significantly influenced by Donald Trump’s policies, according to Governor Andrew Bailey. He stated that while the path is downward, the speed and extent are unclear.
Bailey highlighted the negative impact of a “fragmenting world trading system” on global growth and activity, noting that this uncertainty is causing UK businesses to delay investment decisions. He expressed regret that a long-established system of lower tariffs has been “blown up.”
However, a key domestic factor that could provide clarity is the anticipated slowdown in UK wage growth. Bailey projected wage settlements to be around 3.7% to 3.8% by year-end, a development that could provide the Monetary Policy Committee with confidence for further rate cuts.