Displaying items by tag: Andrew Bailey

Bank of England governor Andrew Bailey, addressing MPs, has expressed optimism about the UK economy despite a recent shallow recession. He noted 'distinct signs of an upturn’, foreseeing one of the mildest recessions in modern history. The Bank's measures, including fourteen consecutive interest rate hikes, aimed to bring inflation back to 2% to help allow for sustainable growth. The bank’s reluctance to cut interest rates reflects worries over the outlook for inflation later in the year. Bailey cautioned against complacency, citing uncertainties such as energy costs and shipping disruptions. Asked about the timing of cuts in the interest rate, he refused to say when or by how much this might happen: his deputy said this would be based on ‘data not dates’.

Bank of England governor Andrew Bailey has identified 'global shocks' as a significant threat to the UK economy. During a treasury committee session, he expressed concerns about the situation in the Red Sea, especially regarding oil supplies. Recent attacks by Iran-backed Houthi rebels on cargo ships in the Suez Canal have prompted some vessels to reroute for safety reasons. Oil giant BP even temporarily halted all oil shipments through the Red Sea due to the threat. Bailey said that these disruptions could impact shipping prices and costs, which would have implications in the monetary policy realm. However, he noted that there has not yet been a prolonged spike in oil prices. Deputy governor Sarah Breeden also highlighted the threat of uncertainty, encompassing macroeconomic conditions, geopolitical tensions, credit risks, and unemployment. Regarding the UK housing market and interest rates, Bailey observed that market interest rates have recently decreased, resulting in lower mortgage costs.