Bank of England Warns Trump Tariffs Risk UK Business Failures

The Bank of England has issued warnings about the risks posed to the UK economy by President Donald Trump's trade policies, particularly the prospect of significantly higher tariffs. The Bank's Financial Policy Committee highlighted that while most UK firms appear resilient, with stable net debt levels and the ability to withstand earnings declines and increased borrowing costs, certain sectors such as manufacturing and retail remain vulnerable. The threat of increased tariffs could lead to a rise in corporate defaults and financial losses for banks, as well as disrupt UK manufacturers reliant on exports to the US. Meanwhile, UK government negotiations continue to seek a deal protecting British steel from escalating US tariffs, with uncertainty persisting after the July 9 deadline passed, although agreements have been reached for other industries like automotive and aerospace. Additionally, the European Union is reportedly close to a temporary trade deal with the US that would impose tariffs higher than those granted to the UK, potentially setting a 10% reciprocal tariff rate while further discussions proceed. These developments underscore the ongoing challenges and market volatility faced by the UK amid global trade tensions and shifting US economic policies.