Britain’s economic outlook looks better than a year ago and there are signs the country is winning its battle against inflation, according to Bank of England Governor Andrew Bailey.
“From an economic standpoint… I would say I’m probably the only one who can come here and say that things actually look better today than they did on this day last year,” he said. “I can say that with some confidence.”
Speaking at the annual meeting of the International Monetary Fund (IMF) in Marrakech, Morocco, Mr Bailey said that in his previous conference speech he had discussed the impact of former Prime Minister Liz Truss and then Chancellor Kwasi’s mini-budget, which Kwarteng had disputed. . .
Mr Bailey added: “We have made significant progress, particularly over the last few months, and have shown signs that inflation can be managed.”
“I think many of us now see this policy as restrictive, and of course I have to say that is exactly what it intends to do.”
This contributed to a “moderate outlook” for the country, he said. The bank’s decision last month to keep interest rates at 5.25 percent was a “major challenge” and he predicted that “this decision will remain in place.”
Chancellor Jeremy Hunt reiterated Bailey’s optimism about the UK’s long-term prospects.
“I’m very optimistic about our long-term future, but in the short term we have to accept that there may be upheavals,” he told Sky News.
“My approach is to say we will deal with these pressures in the short term and at the same time build for the long term by doing things that give us confidence that we will have a successful and prosperous economy in the future “, – he said. in Marrakesh. .
He acknowledged that Britain’s financial position had worsened since the spring as the country was hit by rising interest rates and mounting debts.
Interest rates on British debt this year are expected to be 20-30 billion pounds higher than forecast in the spring, Hunt said. Gas prices are four times higher than before the invasion of Ukraine, he said.
“The financial situation I face is worse than it was in the spring, and that means I will have to make difficult decisions to ensure we are resilient in the face of what is happening in Ukraine, Israel and parts of Africa,” he said. said.
“I think the UK economy is much more resilient than almost any international body predicted compared to when I became chancellor a year ago, and people are looking at some of the underlying strengths,” he added.
“In the short term we are facing problems. We have a problem with inflation, which is still too high. And we are faced with the problem of an international situation in which there is still a lot of turmoil.
“As chancellor, my focus must be on confidence in the face of this disruption. “I really hope for the best, but I need to prepare for the worst because I think we can see that the world is a very dangerous place right now,” he said.
“This is a big change. We need to respond in a way that does not push us into recession, but also ensures that the UK economy can withstand future shocks.
“As we manage the UK economy, we need to be very careful with our public finances. Be very careful not to overextend yourself by borrowing recklessly because we need a sustainable economy.
Source: I News
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