A prominent British think tank warned on Wednesday that the UK’s already sluggish economic growth could be more than halved if Donald Trump wins the U.S. presidential election and enacts broad import tariffs.
In its latest report, the National Institute of Economic and Social Research (NIESR) painted a grim outlook for the UK economy over the next several years, even without Trump’s proposed tariffs. The think tank forecasted growth to remain modest, at just 1.4% in 2026 and 1.7% in 2030, following an expected 1.2% expansion in 2025.
However, the UK, which is particularly sensitive to shifts in global trade patterns, could see its economy grow by just 0.4% next year if Trump follows through with tariffs similar to those he has pledged, according to Ahmet Kaya, principal economist at NIESR.
Kaya also noted that the global economy would likely suffer if Trump imposes tariffs of 60% on Chinese imports and 10% on goods from other countries.
“Relative economic stability is at serious risk if the U.S. raises import tariffs,” Kaya stated during a presentation of NIESR’s latest economic forecasts.
He also pointed out that the Bank of England might have to hike interest rates to combat the inflationary pressure from higher U.S. tariffs, although inflation could still rise by 2 to 3 percentage points over the next two years. Such a rise in borrowing costs would significantly undermine the new UK government’s plans to rely on increased borrowing, along with tax hikes, to finance higher public spending.
Trump, who is locked in a close battle for the White House with Democratic Vice President Kamala Harris, has called tariffs “the most beautiful word in the world.” He argues that his tariff plan would boost U.S. manufacturing, create jobs, raise incomes, and generate trillions of dollars in federal revenue over the next decade.
Weak economic growth in the UK would be a blow to Prime Minister Keir Starmer, who has promised to make the British economy the fastest-growing in the G7.
The increase in social security contributions for employers — the largest tax hike in the government’s recent budget proposal — is expected to lead to a modest rise in unemployment over the next five years, according to NIESR.
