NIESR warns Trump tariffs could halve UK growth and raise inflation
A new report from the National Institute of Economic and Social Research (NIESR) warns that if Donald Trump wins the U.S. presidential election and imposes new tariffs, UK growth could be cut in half. The thinktank predicts a significant rise in inflation and interest rates.
NIESR estimates that Trump's proposed tariffs, including a 60% tariff on Chinese goods, could lower UK growth by 0.7 percentage points in the first two years. Inflation could rise by 3-4 percentage points, while interest rates might increase by 2-3 percentage points.
The report also highlights concerns about the recent UK budget, suggesting it may not significantly boost long-term growth. It notes that the poorest households have faced a 20% drop in living standards since 2021, with recovery not expected until 2026.