Bank of England chief unrepentant on UK economy

The governor of the Bank of England has had a rough week so far, but has come out fighting, in Staffordshire. A House of Lords report on the bank’s failure to anticipate, prevent or control inflation over the past three years blamed it on “inadequate” models and a culture of complacency and group think. He’s also been criticised by UK boosters for his gloomy take on the economy, whose growth numbers the Office for National Statistics revised sharply upwards in September. Having estimated it was 0.2 per cent smaller than pre-pandemic the ONS now says it’s 1.8 per cent bigger. But Andrew Bailey is not for turning. He told the Daily Focus on a trip to Stoke-on-Trent yesterday he sees himself as a realist rather than a pessimist and still thinks the economy’s on the worst potential growth trajectory he’s ever seen. Which is bleak if true, but not entirely unwelcome to inflation hawks – like Bailey – who fear any growth over 1 per cent will kick inflation back up. A tight labour market isn’t helping on that front, and yet another ONS revision has marked “experimental” unemployment figures for last spring down to 3.5 per cent. The subtext: even with net inward migration at 745,000 last year, labour shortages are fuelling inflation. If something has to give, why not try immigration policy?