Bank of England Governor Andrew Bailey has acknowledged significant market volatility in recent weeks, directly linking it to rapidly changing US trade policy under Donald Trump, which in turn contributes to UK interest rate uncertainty. He told MPs that “markets have moved quite a lot since our last meeting.”
Bailey expressed particular concern about a market “constellation” where equity markets fall while US bond yields rise and the dollar depreciates, noting that historically this has influenced White House policy. He urged careful observation of this pattern.
Despite the market turbulence, Bailey reiterated his expectation for a decline in UK wage growth in the coming months. This anticipated moderation in wage settlements is a key domestic factor that could provide the Monetary Policy Committee with confidence to pursue further interest rate reductions.
Bank Governor Acknowledges Market Volatility from US Trade Policy
