Global Economic Uncertainty Intensifies

The Bank of England (BoE) has highlighted a significant increase in global economic uncertainty, attributing this trend to the tariffs imposed by United States President Donald Trump. These measures have notably decreased the prices of global equities, risky corporate credit, and commodities.

Rising Inflation Risks

In light of these developments, the BoE has warned of heightened risks to inflation. Projections indicate that inflation in the United Kingdom could reach 3.75% by the third quarter of 2025. Additionally, the bank anticipates that the Monetary Policy Committee (MPC) may reduce the key interest rate by approximately 75 basis points before the year's end.

UK Banking System's Resilience

Despite these challenges, the Financial Policy Committee (FPC) reassures that the UK's banking system remains robust. It is capable of supporting households and businesses, even under significantly worse economic and financial conditions than currently expected.