{"id":39560,"title":"UK Economy Set for Modest Growth Despite Trump Tariff Concerns","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2025-02-13T06:22:58+00:00","modified":"2025-02-13T06:23:39+00:00","canonical_url":"https://stockmark.it/uk-economy-set-for-modest-growth-despite-trump-tariff-concerns/","markdown_url":"https://stockmark.it/uk-economy-set-for-modest-growth-despite-trump-tariff-concerns.md","json_url":"https://stockmark.it/uk-economy-set-for-modest-growth-despite-trump-tariff-concerns.json","category":"Trading","categories":["Trading","UK Economy"],"featured_image":"https://i0.wp.com/stockmark.it/wp-content/uploads/british-steel.jpg?fit=1200%2C800&quality=89&ssl=1","format":"news","language":"en-GB","content":"The British economy is projected to grow by 1.5% in 2025, according to the latest forecast from the National Institute of Economic and Social Research (NIESR). This upward revision from the previous estimate of 1.2% comes as welcome news for Chancellor Rachel Reeves, though significant headwinds loom on the horizon.\n\nDonald Trump’s aggressive trade policies, particularly the implementation of a 25% tariff on steel and aluminium imports, pose a substantial threat to this growth trajectory. The impact could potentially reduce economic expansion to 1.3% or lower, especially if additional tariffs materialise. British steelmakers are already bracing for the impact of these measures, set to take effect from 12 March.\n\nA recent British Chambers of Commerce survey reveals concerning statistics, with 63% of UK manufacturers exporting to the US anticipating negative effects from the tariffs. The broader business community shows anxiety, as 34% of all UK firms expect some form of impact on their operations.\n\nThe Bank of England’s monetary policy outlook suggests a more conservative approach than market expectations. NIESR predicts only one interest rate cut in 2025, bringing rates to 4.25%, contrary to City investors’ expectations of two cuts. This cautious stance reflects concerns about inflationary pressures from both increased government spending and potential tariff-related costs.\n\nDespite these challenges, the UK economy shows some resilience. Per capita economic growth is expected to rise by 1%, supported by wage increases that should boost real disposable incomes by 1.9%. The government’s planned £70 billion economic injection through the autumn budget could provide additional support to growth prospects.\n\nThe global economic landscape remains uncertain, with NIESR forecasting worldwide growth to hold steady at 3.2% in 2025 before slightly declining to 3.1% in 2026. These projections underscore the delicate balance facing policymakers as they navigate between supporting growth and managing inflationary pressures in an increasingly complex international trade environment."}