US tariffs will push down growth’ in blow to Reeves

Donald Trump’s plans to impose tariffs on US imports will shrink the British economy, Rachel Reeves has been warned by Britain’s top economists.

- ARCHIE MITCHELL

In a blow for the chancellor, members of the Bank of England’s interest rate-setting committee said the implications of the US president’s plans are fairly clear” for economic growth.

“Tariffs would push down growth,” Megan Greene, an external member of the Monetary Policy Committee told MPs yesterday. Ms Greene said the impact on inflation of the tariffs would be less clear, but warned Mr Trump’s plans would leave less money in Britons’ pockets.

The UK is seeking to avoid damaging tariffs, which have already seen Canada and China hit with an extra 25 per cent cost on their goods entering the US. But, despite Sir Keir Starmer confirming yesterday that trade talks have begun with the US on a deal which would see Britain avoid similar penalties, tariffs on UK steel and aluminium are scheduled to take effect next week.

After months of stagnant economic growth under Labour, any further economic shock would be a blow to Sir Keir and Ms Reeves after they made boosting the economy their number one mission.