The National Institute of Economic and Social Research (NIESR) said the protectionist measures planned by the Republican challenger for the White House would result in weaker activity, rising inflation and higher interest rates from the Bank of England.
Ahmet Kaya, an NIESR economist, said that were Trump to go ahead with a 60% tariff on Chinese goods and a 10% tariff on goods from all other countries, the resulting trade war would lower UK growth by 0.7 percentage points and 0.5 percentage points in the first two years.
"The UK is a small, open economy and would be one of the countries most affected," Kaya said. The thinktank has estimated that over two years the UK inflation rate would be three to four points higher while interest rates would be two to three points higher.
In the absence of the Trump tariffs, NIESR forecasts the UK will grow by 1.2% in 2025 and by 1.4% in 2026, with inflation settling at close to the government's 2% target and official interest rates falling from their current level of 5% to 3.25%.
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Denne historien er fra November 06, 2024-utgaven av The Guardian.
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Money hacks How to save on winter sports holidays
When it comes to skiing and snowboarding, going to Europe will always be cheaper than flying to somewhere such as the US or Canada - but costs vary massively on the continent.
Scam refund claims
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Irish tycoon bids to buy out Yorkshire Post owner
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Bitcoin rises after US SEC chair says he will step down
Cryptocurrencies rose sharply immediately after one of the industry's biggest critics, Gary Gensler, said he would stand down as the head of the US financial regulator when president-elect Donald Trump was inaugurated in January.
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Labour swept to power in the wake of a punishing cost of living crisis that hit households hard, with the price of food and energy rocketing, alongside the impact on mortgage rates of Liz Truss's disastrous mini-budget.
Budget blamed for end to 12 months of expansion as optimism slumps
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