The governor of the Bank of England, Andrew Bailey, attended the press conference of the report on monetary policy of the Central Bank at the Bank of England, in the city of London, on May 8, 2025.
Carlos Jasso | AFP | Getty images
The governor of the Bank of England, Andrew Bailey, told CNBC on Thursday that the United Kingdom was heading for a more economical uncertainty, although the country is the First to conclude a trade agreement with the United States Under the controversial pricing regime of President Donald Trump.
“The tariff and commercial situation has injected more uncertainty into the situation … There is more uncertainty now than in the past,” Bailey told CNBC in an interview.
“A British-American trade agreement is welcome in this direction, very welcome. But the United Kingdom is a very open economy,” he continued.
This means that the impact of prices on the British economy does not only come from its own commercial relationship with Washington, but also from those of the United States and the rest of the world, he said.
“I hope that what we see about the trade in the United Kingdom will be the first of many, and it will be repeated by a whole series of trade agreements, but we must see this happen of course, and where it really ends.”
“Because, of course, we examine the rate levels which are probably higher than before.”
In the Bank of England Monetary policy report Released Thursday, the word “uncertainty” was used 41 times on its 97 pages, against 36 times in February, according to a Tally CNBC.
The British Central Bank Reduce interest rates By a quarter of a percentage point on Thursday, passing its key rate to 4.25%. The decision was strongly divided between the seven members of its monetary policy committee, with five votes to reduce the basic point by 25, two votes to keep the rates and two votes to reduce 50 larger base points.
Bailey said that if some analysts had perceived the rate decision to be more fellow than expected – in other words, leaning towards high conservation rates than the cuts quickly – he was not surprised by the tight vote.
“What he reflects is that there are two sides, there are risks on both sides here,” he told CNBC.
“We could obtain a much more serious weakness of the demand we expected, which could then move on to a lower perspective of the inflation that we expected.”
“There is a risk on the other side that we could obtain a combination of more persistence in the effects of inflation which work gradually in the system”, as in wages and energy, while “the ability to supply the economy is lower,” he said.
