Finance
US tariffs to slow UK economy, lower inflation, BoE's Dhingra says
Published by Global Banking and Finance Review
Posted on October 23, 2025
1 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 23, 2025
1 min readLast updated: January 21, 2026
US tariffs are set to slow UK economic growth and reduce inflation, according to BoE's Swati Dhingra, due to weaker demand and trade disruptions.
LONDON (Reuters) -Higher U.S. tariffs on imports are weighing on growth in Britain and are likely to lead to downward pressures on British inflation over the medium term, Bank of England policymaker Swati Dhingra said on Thursday.
"In my view, the primary transmission channel of tariffs to the UK in 2025 come through weaker demand, as tariffs act as a drag on global growth," Dhingra said in a speech to a research conference hosted by Ireland's central bank.
The disruption to trade from tariffs "means lower overall growth – and some downward pressure on prices in the medium term," she added.
Dhingra - who has voted for a faster pace of BoE rate cuts - also said excessively high interest rates could cause longer-term inflation problems by limiting investment in new production capacity and improvements in productivity.
(Reporting by David Milliken; editing by Suban Abdulla)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or Producer Price Index (PPI).
Monetary policy refers to the actions undertaken by a country's central bank to control money supply, interest rates, and inflation to achieve macroeconomic objectives such as stable prices and economic growth.
The Bank of England is the central bank of the United Kingdom, responsible for issuing currency, managing monetary policy, and ensuring financial stability within the economy.
An interest rate is the amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal. It influences borrowing costs and economic activity.
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