UK interest rates 'uncertain' because of Trump tariffs

The Bank of England governor, Andrew Bailey, has told MPs that the future path of interest rates in the UK has become more uncertain because of Donald Trump's chaotic trade policy.

- Heather Stewart

Asked about the impact of on-off tariffs for the Bank's policymaking by the cross-party Treasury select committee, Bailey said "the path remains downwards, but how far and how quickly is now shrouded in a lot more uncertainty, frankly".

The Bank's monetary policy committee (MPC) has cut interest rates four times - to 4.25% - since last summer as inflation has slowed.

Bailey said some businesses were telling the Bank that they were pausing investment because of the uncertainty around trade barriers.

"The impact of fragmenting the world trading system is negative for world growth and world activity; it obviously increases uncertainty," he told MPs. "You hear it now when you go round the country from businesses. One impact of that is that it tends to cause delays and putting off of investment decisions."