October 15, 2025
Bank of England policymaker Alan Taylor cautioned that Britain’s economy may face a “bumpy landing,” with inflation dropping below target and trade headwinds from U.S. tariffs threatening growth.
London, Oct 14, 2025 — Bank of England policymaker Alan Taylor warned Tuesday that the UK economy increasingly faces a “bumpy landing,” citing risks that inflation could fall below the BoE’s 2 percent target and that U.S. trade tariffs may dampen export growth. Reuters
Speaking at King’s College University, Taylor expressed concern that the inflation gains seen in recent years will fade in 2026 as external pressures weigh on the economy. He said that trade diversion—where U.S. tariffs force British exports to seek alternate markets—could lead to weaker growth and make inflation overshoot projections. Reuters
Taylor outlined a scenario in which inflation undershoots the target late in 2026, possibly triggering a prolonged period of underperformance in output and employment. He cautioned that the BoE’s forecasts might miss downside risks if global trade pressures intensify. Reuters
In recent monetary policy votes, Taylor advocated for deeper rate cuts than ultimately supported by his colleagues. At the latest meeting, he and one other member voted to lower the Bank Rate by 25 basis points, though the majority held back. Reuters
Taylor’s warning comes amid broader uncertainty in the UK’s economic outlook: inflation has remained sticky; global trade tensions, especially with the U.S., have escalated; and growth has shown signs of slowing. Markets and policymakers are now re-evaluating how aggressive the BoE should be in cutting rates in 2026.
Some analysts interpret his remarks as a signal that the BoE must tread carefully between reducing rates to support growth and guarding against inflation eroding real incomes. Others see it as an early alert to mounting vulnerabilities in the UK’s post-pandemic recovery.
