The big story of this week continues to be US President Donald Trump’s tariffs. Dubbing today ‘Liberation Day’, Trump plans to reveal sweeping global import tariffs that hit any country that applies a tax to US products.
Despite hopes for a carveout from Trump’s global tariff plans, the UK government doesn’t appear to have secured a trade deal with the US. The Office for Budget Responsibility has been clear that any long-term US tariffs will likely eliminate the £10bn of headroom Chancellor Rachel Reeves left for herself in the October budget and reestablished through benefit cuts in last week’s Spring Statement.
In a month that also sees council tax, TV license, water and energy bill increases, the cost-of-living rises coupled with tariff-induced inflation could severely weaken the pound and see costs increase.
To protect your budget from all this week has in store, lock in today’s GBP/EUR rate with a call to your account manager on 020 8003 4915.
The UK’s problems aren’t all US-grown, however. Housing figures published at the start of the week reveal that mortgage approvals were down by 600 to 65,500 and house prices were completely flat in March, both figures were below forecast and down from the previous month.
There was a big push from buyers to complete on properties ahead of the stamp duty increase that came into effect on March 31, so this decline could be a sign buyers are making more conservative offers or holding off starting the buying process to see if the stamp duty rise would be frozen.
When Trump reveals his tariffs later today, we will see how different responses fare against the trade duties. The UK government said it plans no retaliatory tariffs, whereas the EU has announced plans to meet Trump tariff for tariff, with a package of import duties ready to roll out.
As ever, the markets are impossible to predict, but this week that uncertainty is particularly clear.
