The upcoming US vote could bring big changes to UKʼs economy - way bigger than recent budget updates. Roger Bootle looks at whats coming
If Kamala Harris wins‚ dont expect major shifts; however a Trump victory needs more attention. With Republican control of Congress his power to shape economy would be strong
The Ukraine situation might see big changes: Trump wants to end the conflict which could affect UK-NATO relations. European countries (UK included) might need to spend more on defense - this would hit both business confidence and market stability
Energy markets could see a shake-up: Trumps plan includes boosting oil-gas-coal output to lower prices. This move aims to weaken Iran and Russiaʼs position; however its success isnt guaranteed
Trade policies are raising eye-brows: proposed tariffs (60% on China 10% on others) could affect UK-US trade. But since UK mainly exports services to US – which usually dont get tariffs – impact might be less dramatic than it looks
The dollar would likely get stronger which could help UK exports stay competitive in US markets. Still euro-zone might see its GDP drop by 1% affecting their need for British goods
US bond market is already showing signs of worry about possible inflation rise. Higher US bond rates often push UK gilt yields up - adding to pressure from last weeks budget choices
Some worry about world-wide trade wars; but last time Trump put tariffs in place global impact wasnʼt too bad. Still markets dont like uncertainty and more changes could be coming