Bank of England Governor Andrew Bailey said on Thursday that he is focusing on the shock the economy is likely to feel due to the tariffs imposed by U.S. President Donald Trump on imports and the retaliatory measures taken by other countries.
Bailey added in a statement to CNBC on the sidelines of the International Monetary Fund meetings in Washington: "We are certainly focusing, and largely, on the growth shock," noting that the Bank of England has been trying to achieve a balance between weak growth and domestic supply constraints that are putting pressure on inflation.
He continued: "We have to balance these two things, but I believe that the trade issue is the new part of this story.
He stated that the weak surveys released this week reflect a state of uncertainty among businesses, although the latest official GDP data was encouraging, and he does not believe that the British economy is close to entering a recession.