Published by Global Banking and Finance Review
Posted on October 14, 2025
LONDON (Reuters) -Bank of England policymaker Alan Taylor said on Tuesday that he saw an increasingly likely risk of a "bumpy landing" for Britain's economy with inflation falling too low, in part due to the impact of U.S. President Donald Trump's trade tariffs.
Taylor said in a speech at the King's College University that the rise in British inflation should fade in 2026 and Trump's tariffs were more likely to hurt growth than push up prices as exports unable to enter the United States sought other markets.
In his speech about trade tariffs, Taylor said his "bumpy landing" scenario for the British economy featured inflation falling below the BoE's 2% target in late 2026 and the economy slipping into a weakened state for a sustained period.
"Part of this scenario, in my mind, could end up resulting from some of the trade diversion pressures that I have described today: if we underestimate the forces of trade diversion washing up on our shores in the next year or two, our inflation forecast will miss the mark," he said.
Taylor and one other member of the nine-strong Monetary Policy Committee voted unsuccessfully to cut interest rates by 25 basis points at last month's meeting. In August, Taylor initially called for a big reduction in Bank Rate to 3.75% before changing his vote to ensure a majority for a cut to 4%.
(Reporting by Suban Abdulla; writing by William Schomberg)
