Growth outlook for UK economy 'worst I've seen in my lifetime', Bank of England Governor declares
27 November 2023, 14:06
The growth outlook for the UK economy is among the "worst in my lifetime", the Bank of England's Governor has declared.
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It comes after the Office for Budget Responsibility (OBR) slashed its predictions for growth over the next two years as the Chancellor delivered his Autumn Statement.
Gross Domestic Product (GDP) will rise by 0.6%, the OBR said, beating its previous forecast of a 0.2% contraction.
However, growth will be lower than expected in 2024 and 2025, sitting at 0.7% and 1.4%, respectively.
“If you look at what I call the potential growth rates of the economy, there’s no doubt it’s lower than it has been in much of my working life," Governor Andrew Bailey told The Chronicle.
“It does concern me that the supply side of the economy has slowed. It does concern me a lot.”
According to the Bank of England's own forecasts, the UK economy will barely grow at all in 2024 or 2025.
He added that interest rates cuts are unlikely in the "foreseeable future", which saw a hike in the wake of soaring inflation.
He said: “We’re not going to see another month, I’m afraid, where it’s going down 2pc because of [energy].
“By the end of the first quarter next year, when a lot of that unwind will have happened, we may be a bit under 4pc but we’ll still have 2pc to go, maybe.
"And the rest of it has to be done by policy and monetary policy. And policy is operating in what I call a restrictive way at the moment – it is restricting the economy."
Bailey's comments demonstrates a stark difference between the Bank of England's position and that of the Government, after Mr Hunt said last week the UK economy had "turned a corner".
