The Bank of England governor has warned interest rate cuts are 'more uncertain' as another forecaster downgraded the UK economy. Andrew Bailey said the prospects for easing the burden on Brits was 'shrouded in a lot more uncertainty', largely due to Donald Trump's trade war. He told MPs that the path was still 'downwards' but 'how far and how quickly' was 'unpredictable'. The comments came as the OECD trimmed expectations for UK plc's growth to 1.3 per cent this year and 1 per cent next. In March the international body forecast 1.4 per cent and 1.2 per cent respectively. The latest outlook report suggested inflation will 'linger' this year and debt interest costs will weigh on government finances. Markets have been pricing in limited interest rate cuts for the rest of this year, after the Bank reduced the level from 4.5 per cent to 4.25 per cent last month. However, the voting margin on the Monetary Policy Committee was an extremely tight 5-4 - with two members preferring a half-point cut and two wanting to stay on hold. Giving evidence to the Treasury Select Committee today, Mr Bailey said: 'I think the path remains downwards, but how far and how quickly is now shrouded in a lot more uncertainty, frankly. 'We've added the word 'unpredictable' to 'uncertain' because of the sheer nature of what we're dealing with.' Referring to US tariffs, he added that the 'impact of fragmenting the world trading system is negative for world growth and activity'. 'It obviously increases uncertainty… and one impact of that is it tends to cause delays and putting off of investment decisions, because they are typically a once-only, irreversible decision.' The relationship between the US and China is at 'the centre' of global trade tensions and a 'genuine concern', Mr Bailey said. The OECD pointed to 'heightened trade tensions, tighter financial conditions, and elevated uncertainty' for squeezing growth. The report added: 'Inflationary pressures will initially linger, due to higher import prices and robust wage growth in 2025, but subside over 2026, as spare capacity emerges and the labour market loosens.' The OECD also highlighted that substantial debt payments will continue to weigh on the UK's state finances and 'push up public debt'. The UK economy grew by 0.7 per cent over the first quarter of the year but the think-tank said 'momentum is weakening' as business sentiment deteriorates. Firms have been affected by heightened uncertainty linked to US tariff plans, which were initially launched at the start of April but have seen a bewildering range of changes. The OECD said it expects global economic growth to slow to 2.9 per cent this year and in 2026 from 3.3 per cent in 2024, on the assumption 'that tariff rates as of mid-May are sustained despite ongoing legal challenges'. It highlighted that this slowdown is set to be concentrated in the United States, Canada, Mexico and China. Last month the Bank slightly upgraded its forecasts for UK plc this year, albeit only to 1 per cent from a dismal 0.75 per cent previously pencilled in. Next year's performance was anticipated to be slightly worse at a 1.25 per cent expansion.