Andrew Bailey has said “global shocks” are the biggest threat to the UK economy this year.
Speaking during a Treasury Committee session today, Andrew Bailey, governor of the Bank of England said: “The potential for further global shocks is clearly there.”
“The events in the Middle East are obviously tragic from an individual point of view, interesting from an economic point of view … if you take oil prices, it hasn’t actually had the effect I feared it might.
However, he noted that the world remains a “very uncertain place” before agreeing there are “macro-credential risks” from the potential for energy prices to spike higher.
When asked to clarify what he believed the biggest threat to Britain’s economy to be, Mr Bailey said: “Yes, further global shocks.”
Sarah Breeden, deputy governor for financial stability at the Bank, added: “The risk environment at the moment feels particularly challenging … the set of circumstances that we currently face are extraordinary.”
Mr Bailey and his colleagues were appearing for questions at The Thatcher Room, Portcullis House, Westminster, to speak about threats to the UK economy and what role interest rate rises could play.
It comes as the Bank of England’s base rate remains at a historic, 15-year high after Andrew Bailey and the Monetary Policy Committee held it at 5.25 percent.
Mr Bailey previously issued a grim warning for those suffering under high interest rates, saying that 2024 would bring more tough times.
He warned that the base rate is likely to stay at 5.25 percent for the first six months of 2024, despite repeated demands from critics to bring them down.
He cited the target of getting inflation down to two percent as the primary driver of his policy of high interest rates, saying that reaching that goal would be “hard work”.
Mr Bailey told ChronicalLive back in November last year: “I recognise higher interest rates do have effects. They do have effects on mortgage costs, and they also have an effect on rental costs because they feed through. What I would say, to be honest, is that if we don’t get inflation down, it gets worse.”
