The Bank of England (BoE) has broken its silence on the wide-ranging global tariffs imposed by Donald Trump that have sent shockwaves throughout global stock markets.

Last week, the US President announced a raft of reciprical tariffs in what was dubbed 'Liberation Day'. Several countries have been hit particularly hard - including China - which is home to the world's second-largest economy. Most recently, Mr Trump imposed a 104% tariff on some Chinese imports to the US, as well as further levies on around 60 countries he calls the "worst offenders". China has reacted furiously, sparking fears a huge global trade war could be looming. Now the Bank of England has broken its silence on the imposition of the tariffs.

The Bank of England's Financial Policy Committee (FPC) said in its latest report: "The global risk environment has deteriorated and uncertainty has intensified. The probability of adverse events, and the potential severity of their impact, have risen."

The Bank added the dramatic shift in global trade arrangements could "harm financial stability by depressing growth" in the world's economy. These risks are "particularly relevant" to the UK because it is an open economy with a large financial sector.

It comes after Donald Trump announced a host of new and higher tariffs on all imports to the US, including a whopping 104% tariff on China and a 10% charge on UK goods. The moves have caused chaos among the national stock markets, including London's FTSE 100.

UK stocks fell sharply this morning as Trump's tariffs came into effect. The FTSE 100 dropped 2.34% shortly after opening, wiping out most of the gains made on Tuesday.

According to the FPC, household borrowers in the UK, like people with a mortgage, and businesses with loans have remained resilient despite the tariffs, However, some companies, such as those backed by private equity, are more vulnerable to the developments.

The FPC has also judged that the UK banking system is equipped to support households and businesses. The report added that the level of business insolvencies remained slightly below recent peaks, and mostly affecting small firms with little or no bank debt.

Chancellor Rachel Reeves said the UK is “accelerating trade deals with the rest of the world” amid the ongoing market turmoil and global trading uncertainty.

She is set to meet with her Indian counterpart, Nirmala Sitharaman, today for talks aimed at securing a deal. The UK has bene working on a potential agreement since 2022 with India, which is set to become the world's third largest economy.

The discussions will focus on defence and jobs creation, as well as investment and trade opportunities.

Ministers also hope that a deal can be reached to soften the blow of the Trump's 10% tariff on UK goods. They are also working to strengthen trade ties with countries in the European Union.

The Chancellor said: “In a changing world, this Government is accelerating trade deals with the rest of the world to back British business and provide the security working people deserve.

“We are going further, faster to create the best possible conditions for British business by working to reduce barriers to trade.”

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