UK economy likely to grow at moderate pace amid inflation 'uncertainty', warns Bailey

The Bank of England governor has warned that UK economic growth is set to slow to a “more moderate pace” over the coming quarters, as a recent uptick in inflation and global uncertainty cast doubt over the country’s medium-term outlook.

Speaking at the British Chambers of Commerce (BCC), Bailey said that GDP growth of 0.7% in the first quarter of the year had exceeded expectations,but cautioned that the strength was likely temporary and fuelled by one-off factors.

“First, the unexpected strength in the first quarter was driven by strong outcomes for volatile components of GDP in the monthly figures for March,” Bailey explained. “This was possibly a result of front-loading of activity ahead of increases in stamp duty land tax and vehicle excise duty, and with a temporary boost to trade ahead of the imposition of new tariffs on exports to the United States. Consistent with this, monthly GDP contracted by 0.3% in April.”

By Pedro Goncalves
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