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A UK recession is “in the balance” but there are signs growth is starting to pick up, the governor of the Bank of England has said.
Andrew Bailey made the comments as he hailed Wednesday’s inflation data – which revealed it remained at 4% in January – as “quite encouraging” amid the Bank’s ongoing attempts to bring the rate down to its target of 2%.
“That’s good news, as far as I can tell,” he told the House of Lords economic affairs committee on Wednesday afternoon.
However, the governor added the figure did not fundamentally alter the Bank’s outlook on potentially cutting interest rates in the months ahead.
“I think it leaves us broadly where we thought we were going to be. But that’s obviously encouraging relative to where we could have been,” Mr Bailey said.
The UK’s central bank had forecast inflation would rise slightly to 4.1%, while economists polled by Reuters expected it to creep up to 4.2%.
The rate of inflation has been on a downward trend in recent months – except for a surprise rise in December.
The Bank has held interest rates at 5.25% four times in a row and Mr Bailey previously told Sky News that he expects its next move to be a cut. However, the Bank has yet to decide when this will be.
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