Bank of England Governor Andrew Bailey has voiced considerable concern regarding the possible effects of recent US trade policies on the UK economy.

During his testimony to the Treasury Select Committee, Bailey asserted that President Donald Trump's enactment of punitive tariffs on key US trading partners poses 'substantial' risks to both the UK and the global economies.

Recently, the US government has introduced 25% tariffs on imports from Canada and Mexico, alongside an additional 20% tax on goods from China.

There are also threats of imposing 25% tariffs on imports from the European Union.

These actions have already resulted in a significant drop in global stock markets.

Bailey cautioned that such protectionist trade policies could lead to a decrease in disposable income for UK households.

He emphasized the seriousness of the matter, declaring, 'We must take it very seriously. We must address it.'

The Governor also pointed out the potential long-term repercussions on productivity growth, highlighting that disruptions in global trade could impede the economy's capacity to grow without triggering inflation.

In response to these developments, the Bank of England is actively monitoring a variety of economic indicators to evaluate the possible impact on the UK economy.

This analysis includes reviewing import prices and assessing the implications of forthcoming increases in national insurance for employers, expected to elevate costs by nearly 2%.

Bailey's comments reflect the growing uncertainty surrounding the UK economy amid escalating global trade tensions.

The Bank of England continues to assess monetary policy options to alleviate possible detrimental effects on economic growth and stability.