
Andrew Bailey dismisses warnings the BoE is 'crushing' the economy with high interest rates as he says UK recession is set to be smallest since 1970s
Daily MailThe Bank of England Governor today dismissed warnings interest rates risk 'crushing' the economy as he suggested the recession is set to be the smallest since the 1970s. Andrew Bailey batted away concerns raised by Threadneedle Street's former chief economist Andy Haldane about delays in bringing rates down. Andrew Bailey batted away concerns raised by Threadneedle Street's former chief economist Andy Haldane about delays in bringing rates down The Bank of England kept rates on hold at 5.25 per cent earlier this month, and struck a cautious note on when they would start bringing them down In an interview with Bloomberg yesterday, Mr Haldane sounded the alarm on delaying reductions in rates, saying the Bank risked compounding its mistake in failing to tackle inflation early. Mr Bailey added: 'Against a lot of talk about what is we think is going to be a very small recession, we think the economy is already actually showing distinct signs of an upturn,' Mr Bailey highlighted that inflation does not need to reach the Bank's 2 per cent before it starts cutting interest rates. Goldman Sachs suggested this morning that the first cut is likely to come in May, despite a relatively tight labour market and recovering retail sales Official figures last week showed GDP per head has been far worse than overall activity - reflecting high levels of immigration Swati Dhingra said: 'Despite the disinflation at play, and despite the fact that there has been some real wage recovery, we're still seeing consumption very weak and very different from some of the other advanced economies where there has been a bounce back from the pre-pandemic levels.
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