Following the US President’s sweeping tariffs a mortgage rate warning has been issued to Brits which has the potential to see either an increase in interest rates or they could remain at the current level of 4.5%.
Donald Trump has imposed a 10% tariff on all British goods being imported to the US which starts as 05.01am on 5 April.
The Bank of England governor, Andrew Bailey, said they are “looking very closely” at Trumps “reciprocal tariffs” on the UK.
It added it is the Bank’s job “to make sure that inflation stays low and stable.”
Myron Jobson, Senior Personal Finance Analyst at Interactive Investor, said, “If tariffs contribute to higher inflation, central banks may be forced to tighten monetary policy, which can weigh on bonds and borrowing costs.
“This could impact everything from mortgage rates to corporate investment, potentially slowing economic growth.
“For investors with exposure to US equities – either directly or through pension funds and ISAs – this could translate into market turbulence.
“Any sell-off in US stocks could drag down the performance of funds with heavy US exposure – not least global funds as they typically have a substantial weighting to US equities.”
Shevaun Haviland, Director General of the British Chambers of Commerce (BCC), said, “The Government has kept a cool head so far and must continue to negotiate. This is a marathon not a sprint, and getting the best deal for the UK is what matters most.
“But no-one will escape the fallout from these decisions, there will be an increased risk of trade diversion, and it will wreak havoc on businesses communities across the world.
“Orders will drop, prices will rise, and global economic demand will be weaker as a result. This is a lose-lose situation for everyone.
“So, it is vitally important that the government does not give up on negotiations. Tariffs can be lifted at any time and the US has signalled its willingness to do some form of deal with us.
The Prime Minister Sir Keir Starmer said on Thursday morning, “Last night the president of the United States acted for his country, and that is his mandate.
“Today, I will act in Britain’s interests with mine. Nothing else will guide me, that is my focus,” Starmer added.
“Clearly, there will be an economic impact from the decisions the US has taken, both here and globally.
“But I want to be crystal clear: we are prepared, indeed one of the great strengths of this nation is our ability to keep a cool head.”
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