Bank of England Warns of Inflation Risks from Trade Policies

Swati Dhingra, a member of the Bank of England's Monetary Policy Committee, highlighted the potential inflationary risks posed by increasing tariffs and trade fragmentation during the 2025 Dow Lecture. She emphasized that protectionist measures, including new US tariffs, could disrupt global supply chains, elevate import costs, and complicate monetary policy decisions.

Dhingra pointed out that although the UK imports only about 10% of its goods directly from the US, the broader implications of tariffs could lead to significant price volatility. She stressed the need for a carefully calibrated monetary policy response to address the challenges of trade fragmentation.