The UK economy faces a “material hit” from President Trump’s tariffs, which threaten to rupture global trade, amplifying the risk of further tax rises and spending cuts by Rachel Reeves, forecasters said on Monday.
Growth is on track to slow to just 0.8 per cent this year and next, according to researchers at the consultancy KPMG, as Trump’s shift towards a protectionist trade policy “undermines” the UK economy. KPMG previously thought that the economy would expand by 1.7 per cent this year and 1.4 per cent next year, compared with 1.1 per cent in 2024.
The downgrade comes as investors brace for intense turbulence in financial markets in response to fears that Trump’s tariffs could cause recessions around the world.
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