LONDON: US tariffs unpredictability, trade tensions between Beijing and Washington as well as conflicts in Iran, Gaza and Ukraine pose risks to UK financial stability, the Bank of England warned Wednesday.
“Risks and uncertainty associated with geopolitical tensions, global fragmentation of trade and financial markets, and pressures on sovereign debt markets are still elevated,“ the BoE’s Financial Policy Committee said in its latest half-year report.
“As an open economy with a large financial sector, these risks are particularly relevant to UK financial stability,“ it added.
At the same time, “the UK’s banking system is still in a strong position to support households and businesses, even if economic and financial conditions were to deteriorate”, the report concluded.
London and Washington reached a trade agreement in May that has lessened the impact of US President Donald Trump’s tariffs.
“There remains, however, considerable unpredictability about the near-term evolution of global trade policies with negotiations continuing between the US and a number of its trading partners,“ the BoE said Wednesday.
Trump on Tuesday said he would not extend an August 1 deadline for higher US tariffs to take effect on dozens of economies, as he announced plans for a separate 50 percent duty on copper imports.
The copper levy, which would broaden a slate of sector-specific actions Trump has imposed since returning to the White House, sent the metal’s price soaring to a record high.
The BoE report added that “conflict in the Middle East creates greater risks to energy prices, particularly if the supply of oil and gas were to be disrupted”.
It said that “elevated geopolitical tensions have been associated with an increase in cyberattacks globally”, while the Bank also highlighted “risks around cryptoassets”. – AFP
