Reuters interview with Bank of England Governor Andrew Bailey
The tightening of financial conditions since the start of the war in Iran gives the Bank of England (BoE) room to maneuver to determine the best response to the economic impact of the conflict, the bank’s governor said on Wednesday ​British powerhouse, Andrew Bailey.
The increase in mortgage borrowing costs clearly illustrates the change in investors’ attitudes since the start of the conflict, he told the Parliament’s Finance Committee.
“This tightening, I think, also gives us […] “a little time to assess the situation,” he said.
Andrew Bailey was part of the majority in the BoE’s Monetary Policy Committee (MPC) which voted to maintain the central bank’s benchmark interest rate last April.
The MPC then declared that its response to the energy crisis caused by the war in the Middle East would depend on the scale and duration of the war, as well as its impact on the economy.
Andrew Bailey also said on Wednesday that the outlook for economic growth and the labor market had darkened, with wage deals gradually diminishing.
He stressed, however, that energy prices on the market seemed “relatively moderate” compared to the damage caused to gas infrastructure in the Middle East in the context of the conflict.
(David Milliken report, written by William Schomberg; French version Diana Mandia, edited by Blandine Hénault)
