Brief
Bank of England governor warns low growth and supply shocks will strain public finances
Andrew Bailey cautioned that weaker growth and successive shocks could reduce governments' ability to support economies, days before Chancellor John Healey's Budget.
By Felo News Desk · Published
Bank of England Governor Andrew Bailey warned that low economic growth combined with a rapid succession of supply shocks could erode public finances and limit governments' capacity to cushion downturns, according to statements made at the Istanbul Economic Forum.
What happened
Bailey highlighted Russia’s war in Ukraine and the ongoing conflict in the Middle East as recent examples of large negative supply shocks. He said these events, together with weaker underlying growth, raise government debt levels and make it harder to sustain fiscal support.
What the reports add
Both the Independent and the Evening Standard reproduced Bailey’s remarks in full, noting that he linked the timing of his comments to the upcoming autumn Budget, where Chancellor John Healey will present his first Budget of the year. The outlets quoted the same prepared speech and did not provide differing details.
What was said
Bailey told the Istanbul Economic Forum, “Lower growth and repeated supply shocks weaken the public finances while increasing pressure on governments to provide support.” He added, “Calls for spending to increase are louder when borrowing costs are higher and growth is weaker,” and warned that “if financial markets doubt the path for fiscal policy, then government borrowing costs rise.” Both outlets attributed these quotations to Bailey’s speech.
How it came about
The governor’s comments follow a period of volatile global markets and domestic fiscal pressure. Earlier this year, Felo News reported on the government’s push for physical banking hubs, underscoring the broader theme of maintaining financial stability amid economic challenges. Bailey’s warning arrives weeks before Chancellor John Healey’s Budget, which will outline the UK’s taxation and spending plans for the coming year.
Key facts
- Bank of England Governor Andrew Bailey warned that low growth and successive supply shocks could erode public finances. (independent.co.uk)
- He cited Russia’s war in Ukraine and the Middle East conflict as recent large supply shocks. (independent.co.uk)
- Bailey said the remarks come ahead of Chancellor John Healey's autumn Budget. (standard.co.uk)
Sources
- [1] independent.co.uk
- [2] standard.co.uk
