The Pound Sterling weakened against the US Dollar amid broader underperformance. Increased US tariffs on Chinese goods, escalating trade tensions, have heightened concerns regarding global economic stability. Deutsche Bank anticipates a potential 50 basis point interest rate reduction by the Bank of England (BoE) in May. The BoE’s Financial Policy Committee (FPC) has cautioned that significant alterations in global trade dynamics could negatively impact financial stability by hindering economic growth. The implementation of protectionist measures by the US administration has raised the specter of a global recession. JPMorgan analysts suggest that the rapid escalation of US tariffs on China poses a significant disruption, potentially triggering a global economic downturn. Concerns arise that Chinese firms, facing trade barriers with the US, may seek alternative markets, intensifying competition and posing challenges for the UK economy.
