Bank of England governor Andrew Bailey today warned that the UK economy is “quite static” despite all the stimuli the government has given the country in the past few months.
Speaking on a visit to South Wales, he warned that the better-than-expected UK growth figures released last week donโt change the broader picture.
The latest figures revealed by the Office for National Statistics showed the UK economy expanded by 0.1% in October-December โ better than the 0.1% fall in GDP expected by Threadneedle Street.
โWeโve had the GDP numbers slightly stronger than we thought it would be, but I donโt think it changes the general story we have got, which is the economy has been quite static since late spring last year,” said Bailey.
Bailey added that inflation could fall quicker if the economy was suffering from low demand, rather than weak supply.
โThe big question for us was to what extent is it demand and to what extent it is supply and demand, and that will go on being a big question for sometime.
“Clearly it matters as the more you think it is pure demand than that is going to bring inflation down faster. The more you think it is pure supply it will have the other effect, but actually a combination of the two is probably the reality,โ the Bank of England governor added.
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