Donald Trump’s protectionist policies could cause a global economic slowdown that would damage the UK, Bank of England Governor Mark Carney has said.

The President-elect has already “reinforced existing vulnerabilities” in the financial system, the UK’s central bank argued. Those vulnerabilities were highlighted on Wednesday when bailed out lender, RBS, failed stress tests, suggesting it would not survive another financial crisis.

Carney warned of the risk that the “slowdown in the growth in world trade, which we have seen over the past few years, accelerates because of discrete policy initiatives potentially from the world's largest economy,“ referring to Trump’s promises to tear up US trade deals, put up tariff barriers and bring long-lost manufacturing jobs back to the US.

Speaking after the publication of the BoE’s Financial Stability Report, Carney, said: “While that might not directly affect the United Kingdom, if it slows the pace of global growth - and we're an open trading nation, one of the most open nations in the world - it's going to have a knock-on effect through this economy.”

When asked if the Bank of England would be less concerned about financial stability issues posed by the US economy if Hillary Clinton had won the US election? Carney simply said, “we’ll never know so it’s impossible to speculate.”

In its report, the BoE said the US election had caused “significant changes in global asset prices.” Expectations that Trump will go on a spending spree have pushed up stock markets as companies expect to cash in on the bonanza, the Bank said. The expectations of a large expansion of government debt has made government borrowing more expensive.

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This presents a problem for the UK economy, the BoE said, because British banks are particularly exposed to China, Hong Kong and emerging markets.

The “Trump effect” has caused investors to move money out of these countries as yields have improved elsewhere, pushing up interest rates and meaning many firms may now struggle to be able to service their debts.