Inflation pressures continued to fall in the country, though wage growth remains too high to be consistent with hitting the bank's 2-per cent target, Lombardelli said.
"In the longer term, if global trade were to fragment, this would reduce output and productivity and would raise inflationary pressures," she cautioned.
Lombardelli said she was ‘balanced’ about her own decision, but further gradual progress on disinflation and trade developments led her to vote to cut. The central bank last week cut its key rate to 4.25 per cent from 4.5 per cent, according to British media reports.
The central bank indicated it would be prepared for more aggressive moves should the hit to growth from tariffs prove more severe than anticipated.
“The exchange rate movements we have seen further support lower imported inflation to the UK, although exchange rates can shift in response to trade policy news and the evolution of global risk sentiment. In the longer term, if global trade were to fragment, this would reduce output and productivity and would raise inflationary pressure,” she said.
ALCHEMPro News Desk (DS)
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