June 2, 2018 / 12:07 AM / 2 years ago

UPDATE 1-UK's Hammond 'disappointed' by U.S. tariffs, hopes for progress

(Adds comments on monetary policy)

By David Milliken

WHISTLER, British Columbia, June 1 (Reuters) - Britain is worried about the United States’ decision to levy tariffs on imports of steel and aluminum, but hopes for progress when President Donald Trump meets with other G7 leaders next week, finance minister Philip Hammond said on Friday.

“It worries all of us and we are very disappointed by the action that the United States has taken,” Hammond told reporters at a meeting of finance ministers from the Group of Seven rich nations in the Canadian mountain resort of Whistler.

Canada is due to host a meeting of G7 heads of government next week, and Hammond said he hoped Friday’s discussions could lay the groundwork for EU and Canadian leaders to reach a deal on the tariffs with Trump then.

“We know that the president has a very personal style. He likes to deal personally with issues. So I hope that if we can have a constructive discussion today, there’s a real chance the leaders can make some significant progress when they meet next week,” Hammond said.

Separately, in an interview with Bloomberg TV, Hammond discussed the Bank of England’s latitude on monetary policy.

“In the UK where we have had a spike of inflation which is now coming down, there is clearly scope for the Bank of England gradually and carefully to normalize interest rates over time,” Hammond said, while noting the BoE’s operational independence.

Financial markets had expected the BoE to raise rates in May, but weak first-quarter data prompted the central bank to put those plans on hold.

The BoE has said it still plans to raise interest rates at a gradual pace and to a limited extent, but has steered clear of giving a precise timeline. Markets now price in a roughly three in four chance of a rate rise this year. (Reporting by David Milliken Editing by Leslie Adler)

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