Bank of England Faces Risks from Global Trade Disruption

WASHINGTON (Reuters) – The Bank of England is taking very seriously the risk to economic growth from the upheaval in global trade, Governor Andrew Bailey said on Wednesday, two weeks before the BoE’s next interest rate decision and its latest economic forecasts.

Bailey, speaking on the sidelines of the International Monetary Fund’s spring meetings dominated by U.S. President Donald Trump’s trade tariffs, stated that Britain could be significantly affected by global disruptions as an open economy.

Bailey referenced the IMF’s sharp downgrade of its economic growth forecasts for 2025, both globally and for the UK, released on Tuesday.

> “We do have to take very seriously the risk to growth,” Bailey remarked at an event organized by the Institute of International Finance, when questioned about the impact of U.S. President Donald Trump’s tariff and trade policy.

> “We’re currently working through that because we’ve got an interest rate decision coming in two weeks’ time,” he added.

Investors on Wednesday assigned a 100% probability to the BoE cutting rates by a quarter of a percentage point on May 8 after the next scheduled Monetary Policy Committee meeting.

Regarding global banking rules, Bailey emphasized the necessity of U.S. support for the Basel bank capital regulations. The U.S. banking industry is pressing for further easing of rules after achieving a relaxation of regulations during Joe Biden’s administration.

The BoE in January postponed the implementation of Basel rules by a year to January 2027 to gain insight on U.S. actions, while the European Union is evaluating its next steps.

> “It’s important to give the U.S. time to decide how it’s going to reframe its Basel implementation because we want to go ahead together,” he stated.
> “I think it’s important that we maintain the playing field.”