How Donald Trump’s trade tariffs could affect the UK From rising gilt yields to higher inflation, the UK may suffer indirectly from US tariffs.
Higher gilt yields – and hence higher government borrowing costs – will make it harder for the chancellor, Rachel Reeves, to meet her self-imposed fiscal rules, and could prompt her to make cuts to future spending plans.
But with the EU expected to be subject to US tariffs, and potentially to retaliate, it may become increasingly difficult for the UK to avoid picking sides.
The EU is the UK’s closest and largest trading partner, and a UK-EU summit is planned for the spring at which there are hopes of striking a deal that could help dismantle some post-Brexit trade barriers.
Trading on the brokerage IG’s weekend markets suggests that there could be a fall in the value of the FTSE 100 index on Monday, which would be bad news for investors in the UK’s largest companies.
