1553 GMT - The impact of higher tariffs on the U.K. economy could still be stronger than expected and lead to accelerated interest-rate cuts, even after U.S. President Trump paused reciprocal measures,Capital Economics' Ruth Gregory says. "We have grown more concerned about the downside risks to U.K. activity," she says in a note. First, the Trump administration's flip-flopping over the past week has added to already heightened levels of uncertainty. Second, the pound hasn't weakened against the dollar, which would have made British products more attractive. Third, U.K. fiscal policy may end up being tighter than currently planned, she says. Even if the U.S. trade war doesn't escalate further, risks have increased that the Bank of England will cut rates more than expected. (edward.frankl@wsj.com)
(END) Dow Jones Newswires
April 10, 2025 11:53 ET (15:53 GMT)
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