The economic costs of restricting trade: the experience of the UK - speech by Ben Broadbent

Given at the Federal Reserve Bank of Kansas City 46th Economic Symposium, Jackson Hole, Wyoming
Published on 26 August 2023
Ben Broadbent discusses the economic costs of restricting trade. The pandemic and the war in Ukraine provide a stark illustration of the impact of a sudden contraction in the supply of imported goods for an open economy like the UK. He argues that in 2021 and 2022 these shocks reduced real national income significantly and contributed to the rise in domestic inflation. He explains that although import costs have been declining in recent months, it is likely that monetary policy will have to remain in restrictive territory for some time.