(Reuters) -Britain is more likely to see lower rather than higher inflation as a result of U.S. President Donald Trump’s tariffs, Bank of England policymaker Megan Greene said on Tuesday.
Greene, who has sounded more worried about the persistence of inflation pressure than some of her other colleagues on the Monetary Policy Committee, said Britain’s decision not to levy reciprocal tariffs meant it was likely to become a destination for cheaper goods from Asia and the European Union.
“The tariffs actually represent more of a disinflationary risk than an inflationary risk,” Greene told Bloomberg TV.
However, she said she remained concerned about domestic inflation pressures in Britain due to a lack of supply capacity, which informed the “cautious” approach to rate cuts she has taken so far.
The BoE’s next interest rate announcement comes on May 8. Financial markets on Tuesday priced in a 100% chance of a rate cut, with recession fears rising sharply in the wake of Trump’s imposition of tariffs.
Asked about investors’ worries over the independence of the U.S. Federal Reserve after Trump criticised its chair Jerome Powell, Greene said: “Credibility is the currency of central banks and I think independence is quite an important piece of that.”
(Reporting by Andy Bruce, writing by David Milliken; editing by Suban Abdulla)
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