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'Tariffs could hike risk of firms defaulting on loans'

Western Mail

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July 10, 2025

TRADE tariffs could increase the risk of some businesses falling behind on loans, while a high proportion of the UK workforce is in sectors more exposed to global shocks, the Bank of England has warned.

Households and businesses nonetheless remain resilient, and the UK banking system is equipped to support them even if conditions significantly worsen, the Bank’s Financial Policy Committee (FPC) said in its latest report.

The FPC said there was a high degree of unpredictability about how global trade will evolve, with US President Donald Trump hiking tariff rates in April but negotiations with other countries over possible trade deals ongoing.

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