The US president announced the delay for some nations threatened with higher tariffs, barring China, whose tariffs were raised to 125%.
The UK was not one of the countries whose deal was part of the pause, as the rates imposed were a 10% baseline tariff, which remains in place.
There are questions now over whether this means the Bank of England is more or less likely to cut the base rate after the Monetary Policy Committee vote next month, which could then change the trajectory of mortgage pricing and savings rates.
Mortgage movements
In terms of how it will impact mortgage rates, Ian Futcher, financial planner at Quilter, said the introduction of tariffs had “sparked global economic uncertainty” and increased expectations that the Bank of England could be forced to cut interest rates to “help stimulate growth”.
He continued: “The recently announced pause does change the picture slightly, but there is still a huge amount of ambiguity in how things will play out. This shift in outlook has already begun to feed through into UK swap rates – the mechanism that helps price fixed-rate mortgages.
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“As swap rates have dropped, some lenders have moved to cut mortgage rates, with more likely to follow if market conditions persist. Homeowners with variable or tracker deals could benefit further should the Bank of England act.”
Futcher said those on fixed-rate mortgages should “plan ahead”, and ideally, borrowers should have their paperwork in order at least six months before their current deal ends.
However, Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said that while markets are currently pricing in a rate cut, it may be too early to call.
Haine said: “The central bank has adopted a cautious approach towards lowering rates so far, as rate-setters remain concerned about sticky price pressures. Bank of England Deputy Governor Sarah Breeden said on Thursday that tariffs will impact UK growth, with policymakers also carefully monitoring the impact on the pound and inflation.”
Laith Khalaf, head of investment analysis at AJ Bell, said it’s “really too early to tell what the effect of Trump’s tariffs will be on mortgage rates, because markets are still bouncing around like a slinky on a trampoline”.
Elsewhere, Futcher said the lower interest rates could “erode” returns for savers, particularly for customers with easy-access accounts.
He said: “Tariff-driven inflation could further weaken the real returns savers receive. With that in mind, savers should be proactive—locking into fixed-term deals where higher rates still exist or considering a diversified investment strategy tailored to their time horizon and risk appetite.”
Influence on investments
Despite Trump’s decision to delay, he echoed the calls this week for investors to stay calm when considering what to do with their funds.
The financial planner said: “While it’s encouraging to see signs of diplomatic flexibility, the persistence of elevated tariffs on Chinese goods still poses risks to corporate profits and broader economic stability.
“For investors, this is a reminder that market sentiment can shift quickly, and that staying invested through uncertainty can often prove more rewarding than trying to second-guess the news cycle.”
He added: “Knee-jerk reactions rarely serve long-term goals. If anything, this period demonstrates why remaining invested and staying the course can often yield better outcomes than trying to time the market.”
Pension plans
Retirement pots are also at the mercy of global market changes, and pension values could continue to rapidly slide up and down.
Fucher suggested that any savers considering their pension fund “should consider whether their portfolios reflect an appropriate level of risk given the uncertainty”.
For annuities, there could also be a reduction depending on the decision taken by the Monetary Policy Committee on the base rate next month on 8 May.
He said: “For those considering converting pension savings into a guaranteed income, timing will be key. As ever, professional financial advice can help ensure retirement plans remain on track, even as the external environment shifts.”
This article included quotes from YourMoney.com‘s sister site, Mortgage Solutions. Read: Pause on tariffs rises questions about mortgage rate trajectory
