Trump election is “positive” for the UK, says Bank of England’s Ben Broadbent
Donald Trump’s election as US President has had a “positive” effect on the UK’s economy, according to the Bank of England’s deputy governor.
Ben Broadbent said the new US administration’s policies of higher spending on infrastructure as well as tax cuts and deregulation will help promote global growth, benefiting the UK.
“It is a positive thing,” he said in an interview with the BBC.
Read more: Bank of England in dramatic upgrade of UK growth forecasts
Trump’s election was one contributor to a picture of the global economy that had improved since the Bank’s last inflation report in November.
“The world is doing better; the world economy is healthier,” said Broadbent.
“We’re a very open economy; we tend to follow global cycles.”
The healthier global economy was one cause of a big upgrade in the Bank’s forecast for UK growth, announced yesterday.
The Bank now expects no slowdown over the course of 2017, with two per cent GDP growth predicting the same reading as last year.
The deputy governor pointed to a “disconnect” between households and markets in the aftermath of Brexit as one reason for the Bank’s forecasts being gradually upgraded.
Read more: Is it time for economists to admit they were wrong about Brexit?
Broadbent also reiterated the Monetary Policy Committee’s belief the slowdown in government spending cuts announced by the chancellor in his Autumn Statement would be beneficial for the UK economy.
“Fiscal policy from the government is easier; the degree of austerity has been toned down a little,” he said.
Chancellor Philip Hammond relaxed restrictions on government spending, meaning the deficit in government spending will have to be below two per cent of GDP by 2020-21.
Under his predecessor George Osborne the government was committed to balancing the books by the end of the Parliament in 2020.