Bank of England governor Andrew Bailey.The governor of the Bank of England has destroyed claims by Tory ministers that the economy has “turned a corner”.
Andrew Bailey said the potential for economic growth in the months ahead was “lower than it has been in much of my working life”.
His comments, in an interview with Newcastle Chronicle Live, came just days after chancellor Jeremy Hunt painted a rosy picture of the UK’s economic prospects while delivering his Autumn statement.
He said: “We are delivering the biggest business tax cut in modern British history, the largest ever cut to employee and self-employed national insurance and the biggest package of tax cuts to be implemented since the 1980s.
“An Autumn Statement for a country that has turned a corner.”
His remark was also echoed by his deputy, chief secretary to the Treasury Laura Trott, on Sunday.
But contradicting both of them, Bailey said: “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.
“It does concern me that the supply side of the economy has slowed. It does concern me a lot.”
Bailey also said that bringing inflation down to the Bank of England target of 2% will be “hard work”, despite Rishi Sunak hailing it coming down to 4.6% two weeks ago.
He said: “We are not going to see another month, I’m afraid, where it’s going down 2 per cent.”
And in gloomy news for mortgage holders, the governor said interest rates would not come down again "for the foreseeable future" as the Bank of England struggles to bring inflation under control.
