“Markets Have Moved Quite A Lot” Due to US Trade Policy, Says BoE Head

“Markets have moved quite a lot” in recent weeks due to rapidly changing US trade policy under Donald Trump, a factor directly impacting the uncertainty around UK interest rates, according to Bank of England Governor Andrew Bailey. He told MPs that this volatility demands careful observation.
Bailey expressed particular concern about a specific “constellation” in financial markets, where falling equities, rising US bond yields, and a depreciating dollar have historically influenced White House policy. He urged vigilance, noting that equity markets currently appear overly optimistic.
Despite the market turbulence, Bailey reiterated his expectation for a decline in UK wage growth in the coming months. This anticipated moderation in wage settlements is a key domestic factor that could provide the Monetary Policy Committee with greater confidence to implement further interest rate reductions.