Free Trial

MNI: UK Potential Growth Weak, No Easy Fix - BOE's Bailey

BOE Governor Andrew Bailey on the enduring weakness of UK potential growth.

MNI (LONDON) - There are no quick fixes to the UK’s problems with weak potential growth, Bank of England Governor Andrew Bailey said in his annual Mansion House speech on Thursday, 14 November 2024, though he backed the case for boosting investment and pressing ahead with infrastructure projects.

Bailey made no comment on monetary policy and instead highlighted how average annual UK potential growth had fallen from 2.6% from 1990-to-2008 to just 0.7% from 2020-23, largely due to weaker productivity growth. Higher business investment will be needed to supplement higher public expenditure, but it will take time to improve things, with the positive effects of artificial intelligence likely to diffuse slowly through the economy, he said. (See MNI INTERVIEW: UK Borrowing For Investment Risky - OBR's Miles)

Keep reading...Show less
200 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

MNI (LONDON) - There are no quick fixes to the UK’s problems with weak potential growth, Bank of England Governor Andrew Bailey said in his annual Mansion House speech on Thursday, 14 November 2024, though he backed the case for boosting investment and pressing ahead with infrastructure projects.

Bailey made no comment on monetary policy and instead highlighted how average annual UK potential growth had fallen from 2.6% from 1990-to-2008 to just 0.7% from 2020-23, largely due to weaker productivity growth. Higher business investment will be needed to supplement higher public expenditure, but it will take time to improve things, with the positive effects of artificial intelligence likely to diffuse slowly through the economy, he said. (See MNI INTERVIEW: UK Borrowing For Investment Risky - OBR's Miles)

Keep reading...Show less