Donald Trump’s reign as US president has been good for the UK economy, according to one the the UK’s top central bankers.
Optimistic financial markets since the Republican candidate won the election back in November has helped the UK economy, said Ben Broadbent, the deputy governor for monetary policy at the Bank of England (BoE).
Trump’s proposed policies, including cutting taxes and boosting US infrastructure spending has seen business confidence rise, as this is set to boost the US economy. This economic plan would probably help global growth, Broadbent told BBC Breakfast, which in turn will have a positive impact on the UK.
In particular, the US Dow Jones share index broke through the 20,000 point barrier in January for the first time ever, as investor confidence grew.
“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 healthy global outlook led to a positive outlook from the Bank itself yesterday as the growth forecast for the UK economy is up for the next two years.
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The BoE expects GDP to rise this year, higher than the 1.4 percent which was previously suggested. In addition, the Monetary Policy Committee unanimously voted to leave UK interest rates unchanged at 0.25 percent.
However, Broadbent suggested caution about some of the policies Trump has proposed during his time in office. He said:
“There are other things the US administration has said that people may worry more about, or have done in some markets.
“And I should say overall that… there’s a lot we have yet to see about the detailed plans, including those for fiscal policy, for government spending and taxes and so forth, so we’ll have to wait and see.”
Other elements of the president’s actions could have a detrimental effect on the economy. Trump’s controversial Muslim travel ban for example could hurt the US startup community which is one of the most valuable in the world.
According to a study by the National Foundation for American Policy, 51 percent of US startups valued at $1bn or more had at least one immigrant founder. When valued together these unicorn companies are worth £168bn.