(qlmbusinessnews.com Mon 26th Feb, 2024) London, UK —
Bank of England Indicates UK Recession May Be Waning.
Andrew Bailey, the governor of the Bank of England, suggested to MPs that the UK recession might be coming to an end, citing “distinct signs of an upturn” in the economy. Despite acknowledging the economic downturn at the end of 2023, Bailey emphasized that compared to historical standards, this recession is notably milder.
Official figures revealed a 0.3% contraction in the UK economy between October and December, following a previous decline between July and September. However, the Bank of England hinted on Tuesday that an immediate interest rate cut was unlikely.
Ben Broadbent, the deputy governor of the Bank of England, echoed Bailey's sentiments, challenging the conventional definition of a recession as “unhelpful.” He highlighted differences in calculation methods, particularly when compared to countries like the US.
Some MPs expressed concern over the Bank's reluctance to lower interest rates, with Conservative MP John Baron describing the economy as “flashing red.” However, Bank officials stressed the need for further evidence, particularly in areas like wage growth and job vacancies, to confirm a decisive turnaround in inflation.
Bailey mentioned the potential impact of falling energy prices, anticipating a decrease in overall inflation following Ofgem's expected announcement of a lower price cap on UK electricity and gas bills. However, he cautioned that inflation could rise again over the year.
While Mr. Broadbent acknowledged the possibility of interest rate cuts later in the year, he emphasized that the timing of any adjustments would depend on the actual economic data.
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