Mark Carney, the Bank of England governor that has steered the United Kingdom through the turmoil’s of post-recession growth and the instability and uncertainty of post-Brexit economic growth, has emphasised his confidence in the growing success of the British economy in a press conference today.
Slow First Quarter
Whilst growth in the UK economy was slow for the first quarter, Carney believes that upturns in local sentiment and the increase of household spending across the country is contributing to the slow but steady growth of the economy.
The pound has been looking positive against the dollar in recent days, going up 0.2% against its American counterpart, and whilst the Bank of England has voted to adjust the interest rate from its all-time-low of 0.5%, implemented post-2008, to 0.75%, it seems that they are encouraging national and international spending in order to boost the economy.
Trade War Impact
However, Carney warned of the dangers that international trade could resort to following the imposed tariffs from the United States announced recently.
President Donald Trump announced a 25% tariff on products coming from China, and the Chinese have quickly retaliated with their own. Carney noted that this could be hugely detrimental to the European and United Kingdom economy, particularly as imports from both the United States and China are a significant part of the UK’s overall exports.
The World Trade Organization has echoed these sentiments, arguing that these trade policies from two of the world’s biggest traders could influence any future global trading success. Carney noted in his press conference that already, global exports and manufacturing have fallen since their initial highs at the beginning of the year.
In the past, trade wars have only seen to exacerbate prominent economic problems, such as those implemented during the 1930s in the post-Depression era ultimately leading to less jobs for the countries involved and a hike in general prices.
Donald Trump’s tariffs on China and the European Union could total billions of dollars in lost revenue and create global trade tensions between countries that have engaged in free trade for decades. The World Trade Organization has called on the G20 countries to dissipate trade tensions in order to promote further economic recovery and global trade.
Still, Mark Carney looks positive for the future of England’s economy and that, despite a trade war potentially negatively affecting the United Kingdom, the British economy is still growing, even in these uncertain times.