On Wednesday, a leading British think tank said that the nation’s struggling economic growth rate could get cut in half if Donald Trump wins the U.S. presidential election and implements his tariff policy.
In the latest report, the National Institute of Economic and Social Research (NIESR) showed that regardless of Trump’s tariff, Britain’s economic growth will continue slowing down to 1.2% in 2025, 1.1% in 2026 and reaching only a meager 1.7% in 2030.
But if Trump gets his way, the country’s economic growth could reach as low as 0.4% next year due to tariffs, according to Ahmet Kaya, principal economist at NIESR.
Kaya also added that Trump’s tariff will also negatively affect the world economy since he plans to impose a 60% tariff on Chinese goods and 10% on other country’s imports.
Kaya remarked that the Bank of England may have to raise interest rates to offset the tariff’s higher exporting costs, although inflation would rise only by 2-3 percentage points over two years.
However, the surge in borrowing costs would hamper the UK government’s scheme to expand public spending by borrowing money and increasing taxes.
Trump, who is currently in a heated battle against Vice President Kamala Harris for the presidency, planned to use the tariff to revitalize U.S. manufacturing, create jobs, and reap trillions of dollars in federal revenues over 10 years.
A hammer to the British economic growth would be disastrous to Prime Minister Keir Stamer, who has promised to turn Britain’s economy into the fastest growing in the G7.
NIESR said that the rise in social security contribution and taxation would lead to a slight increase in unemployment for the next five years.
