Bailey warns of better world uncertainty in wake of Trump win

Andrew Bailey warned there is “greater global uncertainty without doubt” as the Bank of England cut interest rates a day after Donald Trump won the US presidential election.

The Governor insisted policymakers would continue to work “constructively” with the incoming president’s administration.

However, he warned of the risks of “fragmentation” in the world economy as governments brace for Mr Trump to launch tariffs on foreign goods entering the US.

Mr Bailey was speaking as the Bank’s Monetary Policy Committee announced it was cutting interest rates from 5pc to 4.5pc.

Mr Trump pledged to impose tariffs of 60pc on Chinese goods entering the US and said he would also target goods entering from other countries.

Mr Bailey said the UK “is an open economy” and policymakers “will have to watch this very closely” when asked about the impact of a potential global trade war.

He said: “I’m going to make any presumptions about what will happen because I don’t think that’s either a) consistent with our policy remit or b) wise to be frank. Let’s see what happens.

“There will, I’m sure, be a very open dialogue between both our government and the US administration.”

He added: “Frankly, there are a lot of risks attached to the fragmentation of the world economy. Let’s see what happens. It’s too early to judge.”