Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the effect on the (a) UK and (b) global economy of a US-China trade war.

HM Government continuously monitors the global economy, and the Office for Budget Responsibility (OBR) produces the Government’s official economic forecasts. The OBR’s most recent forecast was published in March 2019 and can be accessed at https://obr.uk/efo/economic-fiscal-outlook-march-2019/. The UK economy remains resilient, growing for the ninth consecutive year in 2018. The employment rate is currently at a record high, unemployment is currently at its lowest rate since 1974, and real wages are rising.

In October 2018 the IMF estimated the impact of a trade tensions escalation. They estimated the impact would be global real GDP 0.2% lower in 2019 and 0.21% lower in the long term. The analysis also highlighted that the near term negative impact could be exacerbated by a decline in confidence and market reaction.

The UK has consistently stressed the importance of de-escalating trade tensions, which are in no one’s interest.