According to a Bank of England (BoE) survey released Thursday, only 12% of British businesses now list recent U.S. trade policy changes among their top three uncertainties. This is a notable drop from 22% reported just a month earlier.
Partial Tariff Exemption for Britain
U.S. President Donald Trump announced broad tariffs on imports in early April. While Britain received a partial exemption from these tariffs in early May, the final details remain unresolved.
Majority of UK Firms Expect No Impact
The BoE’s monthly panel survey, conducted between May 9 and May 23 with 2,129 companies, revealed that:
70% of businesses expect no impact from U.S. tariffs on their sales, prices, or investment plans.
22% anticipate a drop in sales over the next year due to U.S. trade rule changes.
20% plan to reduce investment.
15% expect to lower prices.
7% expect to increase prices.
Wage and Price Expectations
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Firms expect wages to rise by 3.7% over the next 12 months, the lowest forecast since 2022 when the BoE started tracking this data regularly.
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In the past 12 months, surveyed panelists’ wages increased by 4.8%, which is below the official economy-wide wage rise of 5.6% recorded in Q1 2025.
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Businesses expect prices to increase by 3.7% over the next year, slightly less than the 3.9% expected in April.
Bank of England’s View on Future Rate Cuts
BoE Governor Andrew Bailey said that domestic wage and price trends are likely to matter more than U.S. trade policy for future decisions on interest rate cuts. Although the April tariffs influenced some policymakers to support a rate cut in May, the overall impact is viewed as limited.
