![\"Donald](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/05\/1746797828_300_donald-trump-shows-off-his-tariff-board.jpg\")
Donald Trump has made tariffs the focus of his economic agenda REUTERS<\/p>\nThe Bank of England has warned the UK economy is nearing a critical point, with pressure from trade tensions, inflation, and global uncertainty. <\/p>\n
Governor Andrew Bailey said there\u2019s a growing risk of a sharp drop in demand, raising fresh fears of recession.<\/p>\n
Bank of England Governor Andrew Bailey has warned that the UK faces growing economic uncertainty, despite becoming the first country to secure a trade deal with the US under President Trump\u2019s new tariff regime.<\/p>\n
\u201cThe tariff and trade situation has injected more uncertainty into the situation… There\u2019s more uncertainty now than there was in the past,\u201d Bailey told CNBC.<\/p>\n
While he welcomed the agreement, Bailey cautioned that it would not shield the UK from wider global risks. \u201cA UK-US trade agreement is very welcome\u2026 but the UK is a very open economy,\u201d he said.<\/p>\n
The Bank of England cut interest rates from 4.5 to 4.25 per cent this week, citing weakening demand. <\/p>\n
Bailey also warned of a \u201cmuch more severe weakness of demand\u201d than expected, with businesses delaying investment and recession fears building.<\/p>\n
He said: \u201cThere\u2019s risk on one side that we could get a much more severe weakness of demand than we’re expecting, that could then pass through, obviously, to having a weaker outlook for inflation.\u201d<\/p>\n
At the same time, he pointed to risks on the opposite side – including persistent inflation driven by stronger-than-anticipated wage growth, ongoing supply issues, and the chance of a rebound in energy prices.<\/p>\n
\u201cCompanies are delaying investment decisions\u2026 I am hearing more of that,\u201d he said, highlighting growing hesitation among businesses amid mounting uncertainty.<\/p>\n
The Bank of England\u2019s report also flagged global trade tensions and tariff disputes as major sources of economic instability. <\/p>\n
Bailey singled out the rise in protectionism, particularly involving the United States and China, as a key threat to growth. \u201cThe trade and tariff situation has injected more uncertainty\u2026 and there\u2019s more now than certainly there was in the past,\u201d he said.<\/p>\n
![\"Bank](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/05\/bank-of-england.jpg\")
The Bank of England lowered the base rate<\/p>\n
PA<\/p>\n
Economist Professor Patrick Minford echoed these concerns in an interview with GB News. <\/p>\n
He said: \u201cThese tariffs are causing a recession worldwide and it’s driving down the price of oil, gas and energy. It\u2019s likely to spill over to us.\u201d <\/p>\n
Minford described the situation as \u201can American own goal\u201d and \u201cself-harm by the US,\u201d adding that he would have preferred a larger rate cut than the 0.25 percentage point reduction.<\/p>\n
Minford criticised the pace of monetary easing and argued that the Bank should act more decisively to counter the threat of recession. \u201cI would have welcomed more [of a cut to base rates] actually,\u201d he said.<\/p>\n
![\"Trump](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/05\/trump-and-starmer.jpg\")
The UK the first country to agree deal with US since Trump imposed sweeping tariffs in April<\/p>\n
GETTY<\/p>\n
Despite the rate cut, the Bank indicated that further action would depend on incoming economic data.<\/p>\n
The monetary policy committee said it would continue to monitor signs of inflation persistence and the strength of demand before making further changes.<\/p>\n
The Bank\u2019s cautious tone follows a period of economic volatility, with falling business investment, slower wage growth, and international trade disruptions all weighing on the UK\u2019s outlook. <\/p>\n
Officials signalled that while inflation has eased from its peak, they remain alert to both upward and downward risks in the months ahead.<\/p>\n","protected":false},"excerpt":{"rendered":"The Bank of England has warned the UK economy is nearing a critical point, with pressure from trade…\n","protected":false},"author":2,"featured_media":87476,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[936,51,1700,1232,16,15],"class_list":{"0":"post-87475","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-bank-of-england","9":"tag-business","10":"tag-economy","11":"tag-money","12":"tag-uk","13":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114478150136012005","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/87475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=87475"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/87475\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/87476"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=87475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=87475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=87475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}