## Bank of England governor says risks to UK, global economy from trade wars ‘substantial’ – as it happened

### 5 Mar 2025 11.05 EST

**The Bank of England governor has also warned that the US leaving institutions like the International Monetary Fund and the World Bank would be a “very damaging thing for the world”**.

Speaking to MPs on the Treasury select committee, **Andrew Bailey** said he was encouraged after hearing that the new US Treasury Secretary Scott Bessent “believes in multilateralism, and I strongly welcome that”.

Bailey also said there was a “major shift going on in the US” which the Bank would have to “take very seriously”, after he was quizzed about the impact of potential changes to trade policy and new tariffs.

“Trade supports growth”. On tackling imbalances such as China’s current account surplus, he said:

> The place to solve  is in multilateral forums
> 
> At home, the infrastructure fund signals that the new government will seriously tackle key domestic deficiencies. I look forward to the day in the – probably still somewhat distant – future when German trains may run as fast and punctual as those in France, Switzerland or Austria.

### 5 Mar 2025 09.59 EST

Governor **Andrew Bailey** is now talking. All four members of the rate-setting committee who are testifying at the moment in front of MPs, voted in favour of cutting interest rates from 4.75% to 4.5% at last month’s meeting. Two other members (Swati Dhingra and Catherine Mann) voted against.

Bailey said the central bank expects a pick-up in inflation, but it will be nothing like a few years ago.

### 5 Mar 2025 09.40 EST

**Megan Greene**, another external member of the monetary policy committee, is now speaking. She is a senior fellow at the Watson Institute for International and Public Affairs at Brown University and also teaches at London Business School.

“The disinflationary trend that we’ve had is probably on track,” she said.

“GDP  has roughly flatlined since March,” she added.

Economists had expected an increase of around 140,000 new hires, so this is a significant miss.

**Nela Richardson**, chief economist at **ADP**, explains that companies may be nervous about hiring more staff in the current economic climate:

> “Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month.
> 
> “Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.”

### 5 Mar 2025 09.34 EST

The dollar has been sliding amid “Trumpcession” fears, and has lost 0.9% against a basket of other major currencies. The dollar index fell to 104.75.

**The euro has jumped by 1.2% to $1.0755**, as investors were cheered by. Germany’s proposed €500bn infrastructure fund, and the prospect of a splurge in defence spending, despite fears over trade wars.

Sterling has also strengthened against the US currency, rising by 0.5% to $1.2855.

### 5 Mar 2025 07.53 EST

The selloff in the US dollar is accelerating, after payroll operator ADP reported a sharp slowdown in hiring last month.

The dollar is now down 0.85% today against a basket of other major currencies.

**The US Commerce Secretary has appeared to hint that Donald Trump could cut Canada and Mexico some slack on the tariff front.**

Czech billionaire Daniel Kretinsky’s **EP Group** told the City this morning that the deal is now likely to be signed off in the second quarter of 2025, once a Regulatory Condition related to foreign direct investment in Romania has been resolved.

That Condition is the only one that remains ourstanding, EP says.

, and the deal had been expected to close in the first quarter of this year.

### 5 Mar 2025 07.33 EST

Here’s our full story on the rise in **Tesla**’s UK sales, despite a consumer backlash in the rest of Europe following Elon Musk’s repeated interventions in regional politics.

### 5 Mar 2025 06.20 EST

**Back in the UK, the takeover of Royal Mail is likely to be delayed by regulatory issues in Romania.**

Czech billionaire Daniel Kretinsky’s **EP Group** told the City this morning that the deal is now likely to be signed off in the second quarter of 2025, once a Regulatory Condition related to foreign direct investment in Romania has been resolved.

That Condition is the only one that remains ourstanding, EP says.

, and the deal had been expected to close in the first quarter of this year.

### 5 Mar 2025 07.27 EST

**Canada’s ambassador to the World Trade Organization in Geneva has started the ball rolling to fight Donald Trump’s latest tariffs.**

**Theodore** writes:

> The U.S. decision leaves us with no choice but to respond to protect Canadian interests.
> 
> All hands on deck.
> 
> Everyone play their position.
> 
> I played mine today and on behalf of the Government of Canada, requested WTO consultations with the Government of the United States in regard to its unjustified tariffs on Canada.

**Theodore** adds that Trump’s decision to impose the tariffs was “not the outcome we hoped for”, and urges the US administration to reconsider their tariffs, adding:

> But until then, elbows up.

### 5 Mar 2025 06.20 EST

**Marks & Spencer is handing its 50,000 shop workers a 5% pay rise from 1 April.**

The clothing and food retailer said the pay for UK customer assistants will go up to at least £12.60 an hour, while those in London will get £13.85 an hour.

This will cost the company £95m.

The move comes ahead of the 6.7% rise in the UK’s national minimum wage to £12.21 an hour for most adults from next month.

M&S chief executive **Stuart Machin** said:

> Following the government’s recent increases in tax and national insurance contributions, it’s no secret that M&S and indeed the entire retail sector has some significant cost headwinds to face in the new financial year.
> 
> However, I have always believed that we should not allow these headwinds to impact our hourly paid colleagues.

Several other retailers, including **Sainsbury’s** and **Costa Coffee**, have also recently announced pay rises above the rate of inflation, which hit a 10-month high of 3% in January.

Pay growth in the UK picked up in late 2024 and is being watched closely by the Bank of England, which is tasked with keeping overall consumer price inflation at an annual rate of 2%. The central bank has been cautious about cutting its base rate, currently at 4.5%.

Governor **Andrew Bailey**, chief economist **Huw Pill** and other policymakers will appear before the treasury committee this afternoon to answer questions from MPs on interest rates.

### 5 Mar 2025 06.20 EST

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