Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

BoE's Bailey sees UK economy taking longer to regain pre-pandemic size

ForexSep 29, 2021 04:06PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Governor of the Bank of England Andrew Bailey leaves Downing Street, London, Britain, September 16, 2021. REUTERS/Hannah McKay

By David Milliken and Andy Bruce

LONDON (Reuters) - Bank of England Governor Andrew Bailey said on Wednesday that he expected Britain's economy to recover its pre-pandemic level of output early next year, a little later than the central bank had predicted last month.

His new forecast reflects signs that Britain's economic recovery has slowed by more than expected following its initial rebound from the last COVID-19 lockdown.

Complicating the outlook for the BoE, inflation is also surging, fuelled by widespread supply chain disruption including the panic-buying of petrol over the last week.

Speaking at a European Central Bank panel with other major central bank chiefs, Bailey said the BoE would need to keep a close eye on these forces.

"I expect us to be back to the pre-pandemic level in the early part of next year, possibly a month or two later than we thought we would be at the start of August," Bailey said.

The BoE forecast in August that the economy would regain its pre-pandemic size in the final quarter of this year.

Bailey declined to comment on the likelihood that the BoE might raise interest rates before the end of this year, when its asset purchase programme will still be in its final stages.

Some investors interpreted the BoE's explicit reference to this possibility in September's policy minutes as a signal that an early rate rise would be under active consideration for November or December.

"The preferred tool will always be rates because we understand the effect of rates in the monetary policy transmission mechanism. But that's not to pre-judge what we will decide in November," Bailey said.

He added that the BoE would need to be very focused on inflation expectations and watch for potential second-round effects on inflation from supply shortages, including long queues at petrol stations.

Financial markets currently price in a first interest rate rise to 0.25% from 0.1% by February's BoE meeting, and see a 60% chance of one by December.

BoE's Bailey sees UK economy taking longer to regain pre-pandemic size
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Frank Francone
Frank Francone Sep 29, 2021 3:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Already bigger than pre pandemic size. Are they serious?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email