What we need from Bailey's Bank of the bleedin' obvious

The governor of the Bank of England saying we should "take very seriously" the global effects of Donald Trump's trade war might look like a statement of the bleedin' obvious - but make no mistake, it matters.

- JAMES MOORE

Central bankers choose their words with great caution precisely because they are highly market-sensitive. A statement like that from someone like Andrew Bailey can, and will, be read as a clear signal not only that rates are coming down but that the Bank could be prepared to cut further and cut faster in response to the Trump-induced trade chaos.

Speaking in Washington, Bailey also said: “The UK is a very open economy. It’s not just the relationship between the US and the UK – it’s the relationship between the US and the rest of the world.”

In other words, even if the government does secure a trade deal with the US to bring down the 10 per cent tariffs most UK exports now face (and I have my doubts about that), there will still be an ongoing negative impact. A particularly unpleasant one for a “very open economy” like the UK’s, which is highly sensitive to shifts in global trading conditions – just look at the impact of Brexit.