A leading British think tank said on Wednesday that the country's already weak economic growth rate could be cut by more than half if Donald Trump wins the US presidential election and imposes sweeping tariffs on imports.
In its latest report, the National Institute for Economic and Social Research painted a bleak picture of the UK economy for years to come – even without Mr Trump's tariff plan – with growth slowing to 1.1% in 2026, compared to 1.2% next year, and which would only reach a meager 1.7% in 2030.
But the country, which is sensitive to changes in global trade flows, could post economic growth of just 0.4% next year if the United States implements tariffs like those Trump has promised, a said Ahmet Kaya, senior economist at NIESR.
The global economy would also suffer if Mr. Trump imposed tariffs of 60% on Chinese imports and 10% on imports from all other countries, he added.
“Relative stability is seriously threatened by the potential increase in tariffs on imports to the United States,” Kaya said when presenting the latest NIESR forecast.
The Bank of England would probably have to raise interest rates to counter a rise in prices caused by higher US tariffs, but inflation would likely rise by 2 to 3 percentage points over two years, he said. -he declared.
Such an increase in borrowing costs would deal a severe blow to the plans of the new British government, which wants to use more borrowing in addition to tax rises to finance increased spending.
Mr. Trump, who is in a tight race for the White House against Democratic Vice President Kamala Harris, has called tariffs “the greatest word in the world” and says his plan would boost manufacturing, the employment and income in the United States and would bring in trillions of dollars in federal revenue over ten years.
Britain's weak growth would be a setback for Prime Minister Keir Starmer, who has promised voters to make Britain's economy the most dynamic in the Group of Seven.
According to NIESR, an increase in social security contributions paid by employers – the largest tax hike planned in the government's budget plan announced last week – would lead to a slight increase in unemployment over the next five years.
