Andrew Bailey tells a group of MPs that the fall may already be over, after official figures showed an overarching slowdown in the second half of last year.
There are „distinct signs of recovery” in the UK economy – despite the country slipping into recession late last year, the governor of the Bank of England has said.
Andrew Bailey told a group of MPs that he believed the fall would be one of the deepest recessions in modern times. BankA role in deliberately cooling demand in the economy to help reduce inflation.
He was speaking for the first time since the Office for National Statistics (ONS) – in its preliminary estimate of GDP for October to December last year – recorded a negative output.
A. It left England Technological stagnation Because the economy had recorded negative growth in the last three months.
Mr Bailey pressed the bank's actions 14 times in a row Interest rate The hikes are aimed at bringing the pace of inflation back to its 2% target level and helping sustain growth.
The bank's monetary policy committee suspended a rate hike last summer and resisted a cut due to concerns about the outlook for inflation later in the year.
Mr Bailey said one of those risks was „full employment” in the UK.
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Mr Bailey described this as good news because it suggested the economy was in better health than the headline figures showed – although he warned it was a risk to efforts to reduce inflation because of what it meant for demand.
He also cited concerns about energy costs and disruption to shipping in the Red Sea as pushing up price growth in the second half of 2024.
Asked about the financial market challenges, Mr Bailey replied: „We don't recognize the market curve.
„We're not predicting when or how much (we'll cut rates),” he said.
„But I think you can tell from the specification of that forecast. It's not unreasonable for the market to think.”
Deputy Governor Ben Broadbent said his decision on any rate cuts would be based on „dates not data”.