KPMG has downgraded the UK's growth forecast for 2025 from 1.7% to 0.8%, citing Donald Trump's aggressive trade policies and potential retaliatory tariffs. The report notes that the effects could severely impact global trade and hence UK growth. Recent stock market volatility spurred by China's tariffs on US imports has heightened recession fears. Despite reassurances from US officials, the consensus among economists is that the UK's trade recovery may be jeopardized in the medium term due to these geopolitical tensions.
"Despite the relatively modest 10 per cent tariff on UK exports to the US compared to other partners, the broader impact on global trade could severely undermine UK growth."
"KPMG's report joins a growing chorus of warnings from economists who say Trump's proposals, which could raise the average US tariff rate to its highest level in over a century, pose a serious threat to the UK's trade-driven recovery."
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