Trump tariffs could knock economic growth despite Budget boost, says think tank The Government’s Budget spending plans are expected to provide a “temporary boost” to economic growth although this could be dragged by Trump tariffs, an economic think tank has said.
Adrian Pabst, deputy director for public policy for the think tank, said: “Higher economic growth and continued real wage growth will provide a welcome relief for millions of households who have seen their living standards decline in recent years.
Growth could also be knocked by US President Donald Trump’s tariff plans, with Niesr suggesting that GDP growth was likely to be 0.2 percentage points lower in the first year of tariffs if they were confirmed.
Stephen Millard, Niesr interim director, said: “Although consumer and business confidence fell at the back end of last year leading to a flattening of GDP, we expect 2025 to be better as the large increase in government spending announced in the October Budget kicks in.
In its quarterly economic outlook report, Niesr said it was projecting that the UK economy would grow by 1.5% this year, lifting its previous forecast of 1.2%.
