By GB News (Politics) | Created at 2025-04-03 08:37:34 | Updated at 2025-04-04 04:58:49
21 hours ago
A mortgage rate warning has been given to Britons after Donald Trump unveiled his “Liberation Day” tariffs last night, which will see the UK be slapped with 10 per cent levies.
The tariffs, which will be applied on all goods being brought into the US, will begin at 5.01am UK time on April 5.
Whilst much uncertainty remains over the potential impact on British consumers, experts have warned that interest rates could be impacted by the levies, which Trump heralded as welcoming in a new era of American “economic independence”.
Last month, the Bank of England said it avoided cutting rates further in light of the upcoming tariffs. It said that economic and global trade uncertainty had “intensified”.
The tariffs, which will be applied on all goods being brought into the US, will begin at 5.01am UK time on April 5
Getty/Reuters/White House
Unveiling a list of the upcoming tariffs, Trump said levies will not be fully reciprocal rate but will instead be half the tariff rate for some countries
REUTERS
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However, the markets are still predicting at least two more cuts in 2025.
This would take the base rate to four per cent by the end of the year. If this happens, it is likely that saving rates would drop too.
Myron Jobson, Senior Personal Finance Analyst at Interactive Investor, said: “If tariffs contribute to higher inflation, central banks may be forced to tighten monetary policy, which can weigh on bonds and borrowing costs.
"This could impact everything from mortgage rates to corporate investment, potentially slowing economic growth.
“For investors with exposure to US equities - either directly or through pension funds and ISAs - this could translate into market turbulence.
"Any sell-off in US stocks could drag down the performance of funds with heavy US exposure – not least global funds as they typically have a substantial weighting to US equities.“
Interest rates could stay high if prices are increased for long enough to affect the rate of inflation
GETTY
Earlier this week, the Office for Budget Responsibility warned that a global trade war could decimate Rachel Reeves’ £9.9billion of headroom increasing the risk of further tax rises and spending cuts.
Following last night’s announcement, Sir Keir Starmer vowed to respond with "cool and calm heads" after Donald Trump last night slapped the UK with a 10 per cent tariff.
Speaking this morning, the Prime Minister said: "Last night the president of the United States acted for his country, and that is his mandate.
"Today, I will act in Britain’s interests with mine. Nothing else will guide me, that is my focus," Starmer added.
"Clearly, there will be an economic impact from the decisions the US has taken, both here and globally.
"But I want to be crystal clear: we are prepared, indeed one of the great strengths of this nation is our ability to keep a cool head."
