Tariffs live: EU pauses counter-tariffs on US goods for 90 days but warns Trump over trade deal

US President Donald Trump’s tariffs are likely to hamper economic growth in the UK but it is “too early to call” their effect on inflation, a Bank of England policymaker says.

Sarah Breeden, the Bank’s deputy governor for financial stability, said on Thursday that the trade tariffs “would be expected to weigh on UK activity”.

But the impact on inflation is “not clear-cut”, Ms Breeden said, adding that the hit to demand could bring downward pressure while supply chain disruptions could bring upward pressure to inflation.

“Given all of the uncertainties, I think it’s too early to call the overall impact on inflation for the UK, and hence the appropriate monetary policy response at this stage,” she said.

The tariffs had prompted increased bets that the Bank would cut interest rates at its next policy meeting in May.

Ms Breeden said the new levies marked “the most significant change in trade policy in a century”.

Breaking news: The White House has told CNBC that US tariffs on China now total 145 per cent after a latest hike.

Earlier, they had been raised to 125 per cent.

Donald Trump’s tariffs on the UK are not temporary, the Prime Minister has said.

Asked whether he had spoken to the US president about the tariffs, Sir Keir Starmer told reporters: “My team are in contact with the president’s team every day.”

Asked whether President Trump “wasn’t taking his calls”, the Prime Minister said: “No not at all. You have to understand that for the UK and the US we’re actually talking all the time.”

He added: “At the same time, I’m clear that this is a change which isn’t, in my view, temporary and therefore we’ve got to do the margins of making sure we turbocharge our own economy.”

China says it will immediately restrict imports of Hollywood films in retaliation for President Trump’s escalation of US tariffs.

After three decades during which China annually imported 10 Hollywood films, its National Film Administration said Mr Trump’s increase of tariffs on Chinese imports would further sour domestic demand for US cinema in China after years of decline.

“We will follow market rules, respect the audience’s choices, and moderately reduce the number of American films imported,” the NFA said on its website.

Chris Fenton, author of “Feeding the Dragon: Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA, and American Business”, said the move was a “super high-profile way to make a statement of retaliation with almost zero downside for China”.

Hollywood studios once looked to China, and its giant film market, to help boost box office performance of movies. But domestic films increasingly have outperformed Hollywood’s fare in China.

Now, US films account for only 5% of the overall box office receipts in China’s market. And worse for Hollywood, China taxes that small amount 50% before any revenues go back to the USA, Mr Fenton said.

US stock markets are down again today, with a mix of reasons likely at play, writes Karl Matchett.

First, the wild buying yesterday sent some equities up more than 20 per cent – so some profit-taking would not be unexpected, especially if investors had locked in losses in the previous days’ falls.

Secondly, US inflation data is coming in and is surprisingly lower than expected; that, plus a slight restoration in markets, may change calls for cutting interest rates. Higher interest rates are (very broadly and basically) less-good for equities prices, so there’s a balancing act there.

And finally, as AJ Bell’s Russ Mould points out, is the actual question of whether share prices should be as high as they were or whether the tariff-induced sell-off just exaggerated something that was on its way anyway.

“There is an old market saying that stock market tops are a process, while bottoms are an event.

“The S&P 500 had been making heavy weather of it even before Donald Trump’s trade and tariff interventions and had already started to roll over in a classic example of that pattern, so the big issue now is whether Wednesday’s spike is a buy signal or simply a cruel bear trap for unwary bulls who are accustomed to ‘buy the dip’,” he said.

Britain must not just “sit back and hope” but “rise to the moment” in the face of uncertainty over Donald Trump’s tariffs, Sir Keir Starmer has said.

The Prime Minister said the UK should “recognise where our future lies”.

The 10% “baseline” levy on all goods entering America remains in place.

On a visit to Doncaster, Sir Keir said: “I’m not going to stand here and pretend that tariffs are good news. That is not true, and you wouldn’t believe me if I said it, but just as we’ve seen recently on defence and security across Europe, and with Ukraine, they do make one thing very clear, and that is that the world is changing, and we as a country must change with it.

“In other words, we’ve got to rise to the moment here, recognise where our future lies, renew Britain and deliver security for working people.”

Ministers still hope an economic deal with America can be reached.

Chancellor Rachel Reeves will seek to negotiate with the US when she visits Washington at the end of April for the International Monetary Fund’s spring meeting of global finance ministers, she told the Financial Times.

She also said a UK-EU summit on May 19 would be a chance “to refresh our relationship and make it easier for businesses to trade”.

Carsten Brzeski, Global Head of Macro at ING, said he believed Mr Trump’s U-turn was because he considered he had won against China.

He said: “US President Trump has decided on a 90-day reprieve for the “higher reciprocal tariffs” for countries that have not “retaliated” against his announcements from last week. That is, all countries except China.

“Apparently, this shift wasn’t because of the financial market carnage we have been seeing, but Trump declaring “a victory”.

“Given that next to Mexico and Canada, the most important trading partners of the US, China and the EU, have not gone into any negotiations, makes this ‘victory’ look like celebrating a big party when your favourite national soccer team just won against San Marino.

“In all honesty, the current situation is not only chaotic, it’s crazy.”