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Investing.com -- Higher U.S. tariffs on imports are weighing on Britain’s economic growth and will likely create downward pressure on inflation over the medium term, Bank of England policymaker Swati Dhingra said on Thursday.
Speaking at a research conference hosted by Ireland’s central bank, Dhingra explained that tariffs primarily affect the UK through weaker demand.
"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.
She added that the trade disruption caused by these tariffs "means lower overall growth – and some downward pressure on prices in the medium term."
Dhingra, who has consistently advocated for a faster pace of interest rate cuts at the Bank of England, also warned about potential long-term inflation problems that could arise from maintaining excessively high interest rates. She noted that high rates could limit investment in new production capacity and hinder improvements in productivity.
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