Ahmet Kaya, a NIESR economist, stated that Trump's proposed tariffs could reduce UK growth by 0.7 percentage points in the first two years, significantly stunting economic performance.
NIESR estimates that UK inflation could rise by 3-4 points due to Trump's tariffs, alongside a potential 2-3 point increase in interest rates imposed by the Bank of England.
Stephen Millard, deputy director of NIESR, expressed skepticism regarding the impact of public infrastructure spending on long-term growth, suggesting it mainly compensates for previous cuts.
The thinktank emphasized that, in a scenario without Trump's tariffs, UK growth would be 1.2% in 2025 and 1.4% in 2026, alongside reduced inflation targets.
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