By Ed Frankl
Retaliatory tariffs against the U.S. would push inflation higher, Bank of England Gov. Andrew Bailey said Thursday.
President Trump's administration has placed a 10% tariff on most U.K. goods imports to the U.S., with 25% levies on aluminum, steel and cars. The U.K. has been hopeful of a trade deal with the U.S., but had previously drawn up a list of items for potential retaliation after Trump's April 2 announcement.
However, while tariff retaliation would push inflation up, redirection of trade--potentially from China to avoid higher U.S. import barriers--could bring inflation downward, Bailey told CNBC in an interview.
Inflation in the U.K. is expected to rise in April, the governor said, but it would mainly be due to changes to energy and water prices local to the U.K., he said.
While the tariffs imposed on the U.K. would lower economic output, the economy isn't close to a recession, Bailey added.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
April 24, 2025 11:52 ET (15:52 GMT)
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