Bank of England’s Bailey says UK not on verge of recession

Bank of England Governor Andrew Bailey wants everyone to take a breath. The UK economy, he says, is not sliding toward recession, even as growth forecasts remain stubbornly underwhelming and a cocktail of global pressures continues to weigh on the outlook. What Bailey actually said The BoE’s own projections paint a picture of an economy trudging forward at a modest pace. GDP growth is forecast to come in around 1.1% in 2026, ticking up slightly to 1.2% in 2027. Inflation, meanwhile, is expected to peak at around 3.3%, which remains above the BoE’s 2% target. Bailey has pointed to subdued second-round inflation effects as a reason for cautious optimism, suggesting that price increases aren’t feeding into a self-reinforcing wage-price spiral. On the interest rate front, the BoE has held the Bank Rate steady at 3.75%. The most recent decision came via a 6-3 vote, meaning the Monetary Policy Committee is largely unified but not unanimous. That rate is expected to stay put through at least mid-2027, barring any major surprises. The headwinds Bailey isn’t ignoring The labor market is weakening. Bailey has flagged weak productivity and an aging population as twin structural pressures that...