Andrew Bailey also said disastrous mini-budget had damaged Britain’s international reputation
Households are under intense pressure from inflation after the rise to 11.1% in October, driven by soaring energy bills and the rising cost of a weekly shop. Data from the Office for National Statistics showed the annual inflation rate last month jumped a percentage pointOfficial figures showed Britain’s economy took the first steps towards a potentially lengthy recession in the three months to September, with a 0.2% decline in GDP in the third quarter.
Answering questions from MPs on the Treasury committee, Bailey and three other members of the Bank’s monetary policy committee said part of the reason the country was being held back was a sharp decline in the size of the workforce since Covid. “The UK is a dramatic outlier compared to all of the other advanced economies. This is a puzzle,” said MPC member Catherine Mann. Employment in the UK remains lower than before the health emergency struck, thanks to a rise in older workers leaving the workforce and record levels of long-term ill-health among working-age adults.
Swati Dhingra said Brexit was holding back UK trade and driving up inflation by adding to the cost of imported food and other products. “It’s undeniable now that we’re seeing a much bigger slowdown [in trade] in the UK compared to the rest of the world,” she said., alongside a negative impact on wages and living standards in Britain, adding: “We’re definitely underperforming compared to our peers.
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