RE: US election6 Nov 2024 06:31
UK growth would be halved in the event Donald Trump wins the US presidential race and imposes the swingeing new tariffs he has threatened, a leading thinktank has warned.
The National Institute of Economic and Social Research (NIESR) said the protectionist measures planned by the Republican challenger for the White House would result in weaker activity, rising inflation and higher interest rates from the Bank of England.
Ahmet Kaya, a NIESR economist, said that, were Trump to go ahead with a 60% tariff on Chinese goods and a 10% tariff on goods from all other countries, the resulting trade war would lower UK growth by 0.7 percentage points and 0.5 percentage points in the first two years.
“The UK is a small, open economy and would be one of the countries most affected,” Kaya said. NIESR has estimated that over two years the UK inflation rate would be 3-4 points higher while interest rates would be 2-3 points higher.