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Trade Diversion from US Tariffs May Cool UK Inflation, Says Bank of England Official
Trade Diversion from US Tariffs May Cool UK Inflation, Says Bank of England Official
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BTCCSquare news:
Monetary Policy Committee member Alan Taylor pointed to 'trade diversion' as a key factor moderating UK inflation. Higher US tariffs on Chinese exports are redirecting goods to other markets, including Britain, reducing import costs and easing consumer prices.
UK inflation currently stands at 3.2%, with projections suggesting a decline to the Bank of England's 2% target by mid-2026. Wage growth slowdowns contribute to this trend. Taylor emphasized the distinction between trade diversion and trade destruction, noting China's strategic shift toward diversified export markets.
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