Overview

• US-imposed 10% tariffs on UK goods are viewed as predominantly disinflationary, with trade diversion and export substitution expected to lower UK inflation.
• Megan Greene, a BoE policymaker, has acknowledged countervailing inflationary risks from supply-chain reconfiguration and trade fragmentation.
• The Bank of England is expected to cut its base interest rate to 4.25% in May, reflecting slower economic growth projections tied to global trade disruptions.
• Recent increases in employer National Insurance contributions and the national living wage have not led to rising unemployment, according to Greene.
• Currency fluctuations, particularly a depreciating US dollar, are seen as potentially disinflationary for the UK, though the long-term trend remains uncertain.