Trump effect on UK interest rates?

What_time_is_it

If (and obviously this is all hypothetical!) Trump does indeed go down the route of tariffs on imports and increasing US borrowing to fund tax cuts, is this likely to lead to inflationary pressures both in the US and beyond, and thereby increase the likelihood of interest rates staying higher (or reducing less?!) during 2025 and beyond?

It's been a while since we had tit for tat tariffs knocking about so I'm not sure how it might play out.

(Edit - not looking for political opinions, or the rights and wrongs of it, just what you think the economic impact of his proposed policies might be, particularly on UK interest rates)

PixelPound

Tit for tat with EU & US, with the UK stuck in between unsure which way to go. 

Keep_pedalling

As he lies about everything the only thing we can expect is the unexpected☹️

InvesterJones

What_time_is_it said:

If (and obviously this is all hypothetical!) Trump does indeed go down the route of tariffs on imports and increasing US borrowing to fund tax cuts, is this likely to lead to inflationary pressures both in the US and beyond, and thereby increase the likelihood of interest rates staying higher (or reducing less?!) during 2025 and beyond?

The short term reaction in the UK markets has been reduced borrowing costs (yields decreased), which tends to happen when people think interest rates will reduce, rather than increase. Longer term, we'll have to see.

RolloTomasi68

Maybe wise to add a small amount of hard assets like Bitcoin and Gold to guard against more fiat debasement and inflation.

What_time_is_it

RolloTomasi68 said:

Maybe wise to add a small amount of hard assets like Bitcoin and Gold to guard against more fiat debasement and inflation.

Is Bitcoin a hard asset? 

EthicsGradient

InvesterJones said:

What_time_is_it said:

If (and obviously this is all hypothetical!) Trump does indeed go down the route of tariffs on imports and increasing US borrowing to fund tax cuts, is this likely to lead to inflationary pressures both in the US and beyond, and thereby increase the likelihood of interest rates staying higher (or reducing less?!) during 2025 and beyond?

The short term reaction in the UK markets has been reduced borrowing costs (yields decreased), which tends to happen when people think interest rates will reduce, rather than increase. Longer term, we'll have to see.

Is that the reaction? 10 year gilt yield jumped 0.03% on market opening: UK 10 year Gilt Bond, chart, prices - FT.com

InvesterJones

EthicsGradient said:

InvesterJones said:

What_time_is_it said:

If (and obviously this is all hypothetical!) Trump does indeed go down the route of tariffs on imports and increasing US borrowing to fund tax cuts, is this likely to lead to inflationary pressures both in the US and beyond, and thereby increase the likelihood of interest rates staying higher (or reducing less?!) during 2025 and beyond?

The short term reaction in the UK markets has been reduced borrowing costs (yields decreased), which tends to happen when people think interest rates will reduce, rather than increase. Longer term, we'll have to see.

Is that the reaction? 10 year gilt yield jumped 0.03% on market opening: UK 10 year Gilt Bond, chart, prices - FT.com

Seems to be below yesterday's close now though. Looking at the secondary market they're (all up to T40) also down today.

slinger2

The first step is to see what happens tomorrow with the BOE base rate. Likely to still be a 0.25% cut.

Probably a bigger effect going forward will be the exchange rate rather that the interest rate (although obviously the two are somewhat related)

simonsmithsays

slinger2 said:

The first step is to see what happens tomorrow with the BOE base rate. Likely to still be a 0.25% cut.

Really?

Doubtful IMO

What_time_is_it

simonsmithsays said:

slinger2 said:

The first step is to see what happens tomorrow with the BOE base rate. Likely to still be a 0.25% cut.

Really?

Doubtful IMO

Interesting. Most onlookers seem pretty certain of a 0.25% cut tomorrow. Always good to hear another opinion. You think the rate will stay at 5% because of potential inflationary pressures? Or something else?