UPDATE: |Bank of England issues warning after Donald Trump tariff announcement News

The American president has announced a series of new and higher tariffs on all imports to the US

The Bank of England has issued a stark warning on the prospects of economic growth after Donald Trump announced new tariffs on imports to the US.

The central bank’s Financial Policy Committee (FPC) warned that “uncertainty has intensified” in a report published this week.

However, it added that households and businesses remain resilient and the UK banking system is equipped to support them.

It comes after President Trump announced a series of new and higher tariffs on all imports to the US, resulting in retaliatory charges including by China.

The FPC report stated: “The global risk environment has deteriorated and uncertainty has intensified. The probability of adverse events, and the potential severity of their impact, have risen.”

The Bank warned that the major shift in global trade arrangements could “harm financial stability by depressing growth” in the world’s economy.

These risks are “particularly relevant” to the UK because it is an open economy with a large financial sector, it said.

The FPC said that households with mortgages in the UK and businesses with loans have remained resilient on the whole, but some companies will be more vulnerable to global developments.

Since Mr Trump’s tariff announcements last Wednesday, the prices of global stocks, commodities, and risky corporate credit have dropped sharply and the value of the US dollar has fallen.

This has resulted in turmoil in global financial markets amid growing fears over a global trade war and the threat of a looming recession in the US.

On Wednesday, Mr Trump announced he would pause his new tariffs on most nations for 90 days as his administration prepares to engage in country-by-country negotiations. However the president further increased the tax rate on Chinese imports to 125 per cent .

He posted on Truth Social that because more than 75 countries had reached out to the US government for trade talks and had not retaliated in meaningful ways he had authorised a 90-day pause and a lowered “reciprocal tariff” of 10 per cent “effective immediately”.

He later told reporters that he pulled back on many global tariffs – but not on China – because people were “yippy” and “afraid” because of the stock market declines. He added that while he expected to reach deals, “nothing’s over yet”.

Prime minister Sir Keir Starmer, speaking on a visit to Doncaster on Thursday, said the tariffs signalled a shifting world to which the UK must adapt, without directly criticising the US president.

“I’m not going to stand here and pretend that tariffs are good news. That is not true, and you wouldn’t believe me if I said it,” he told reports. “But just as we’ve seen recently on defence and security across Europe, and with Ukraine, they do make one thing very clear, and that is that the world is changing, and we as a country must change with it.”

Ministers still hope an economic deal with America can be reached to soften the blow of the tariffs, but are also seeking to strengthen trade relations with other countries to protect the economy from further potential shocks.

Chancellor Rachel Reeves will seek to negotiate with the US when she visits Washington at the end of April for the International Monetary Fund’s spring meeting of global finance ministers, she told the Financial Times.