Interest rate cuts depend on trade wars

THE speed at which UK interest rates can be cut is "shrouded in a lot more uncertainty" due to the "unpredictable" global economic situation and a US-China trade war, the governor of the Bank of England has said.

- By Anna Wise

Andrew Bailey told MPs during a Treasury Committee session that the Bank had “genuine concerns” about escalating trade tensions.

The governor, who was being quizzed alongside fellow members of the Bank’s Monetary Policy Committee (MPC), said it was not clear-cut where UK interest rates will go next.

“I think the path remains downwards, but how far and how quickly is shrouded in a lot more uncertainty,” he said.

“We've added the word ‘unpredictable’ to ‘uncertain’ because of the sheer nature of what we’re dealing with.”