LIVE MARKETS-UK to avoid reciprocal tariffs but growth to fall anyway - Goldman

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UK TO AVOID RECIPROCAL TARIFFS BUT GROWTH TO FALL ANYWAY - GOLDMAN

British politicians and officials are trying hard to dodge upcoming tariffs on 'Liberation Day', and while Goldman thinks the UK will avoid the worst, they slightly downgrade their growth forecasts anyway.

"Our baseline assumption is that the U.S. imposes duties on critical goods imports from the UK. But we assume that the UK ultimately avoids a reciprocal tariff given balanced trade," they said in a Monday note.

"That said, even if the direct hit to GDP from lower exports to the U.S. is modest, the overall drag on UK growth from trade fragmentation is likely to be greater."

"Our updated global baseline now assumes notably larger U.S. tariffs on other economies including the EU. We have consequently downgraded our 2025 growth forecasts for both the US and the Euro area, implying greater spillovers to the UK."

As a result, they lower their UK real GDP growth forecast for 2025 to 0.8% from 0.9%.

(Alun John)

EARLIER ON LIVE MARKETS:

LIBERATION DAY QUESTIONS: WHO AND WHAT? HOW HIGH? HOW LONG? CLICK HERE

STOXX REBOUNDS FROM NEAR 2-MONTH LOWS CLICK HERE

BEFORE THE BELL: EUROPE EYES TENTATIVE BOUNCE AS Q2 STARTS CLICK HERE

A DEEP BREATH BEFORE 'LIBERATION DAY' CLICK HERE