BoE's Greene: US Tariffs Expected to Lower UK Inflation

Bank of England policymaker Megan Greene stated that tariffs imposed by U.S. President Donald Trump are more likely to lower rather than raise UK inflation, although she acknowledged significant uncertainties regarding their ultimate effects. Greene explained that the UK’s choice not to impose reciprocal tariffs could result in an influx of cheaper goods, putting downward pressure on prices. However, she also highlighted domestic inflationary factors, such as rising labour costs from higher social security contributions and a nearly 7% increase in the minimum wage. Greene noted that weak productivity and supply-side constraints remain concerns, and that slower economic growth should help bring inflation toward the Bank’s 2% target. Financial markets are largely expecting a rate cut at the Bank of England’s next meeting as a result of these shifting risk assessments.