During a recent talk in Brussels, Andrew Bailey, the Governor of the Bank of England, emphasized the importance of collaboration in tackling global economic imbalances amidst growing uncertainties. Euronews reports that Bailey particularly cautioned against fragmentation, which poses a threat to global growth.

Read also: The Impact of Global Economic Shifts on Short-Term Trading

Addressing the audience at an event organized by the think tank Bruegel, Bailey highlighted the need for international cooperation and the essential role organizations like the International Monetary Fund play in addressing these imbalances. This discussion comes at a time when global markets face the repercussions of US President Donald Trump’s trade policies, including recent developments in tariff impositions.

On the topic of domestic matters, Bailey remarked on the UK’s economic situation, asserting that while inflationary pressures have eased slightly, the country still resides in a weak growth environment. This assessment led the Bank of England to reduce interest rates by a quarter point to 4.5%, reflecting their response to the nation’s economic climate. Concurrently, projections for UK economic growth in 2025 have been halved, yet forecasts for 2026 and 2027 have been upgraded to 1.5% growth according to data from the IndexBox platform.

Additionally, the Office for National Statistics confirmed an upward trend in wage growth across both public and private sectors, showing a 5.9% increase in average weekly earnings year-on-year for the last quarter of the previous year. While these numbers signify positive movement, Bailey noted that the rise in pay growth was slightly below expectations. He concluded by touching upon inflation’s expected short-term rise, attributing it primarily to increased regulated prices like energy and water, thus not reflecting the underlying economic conditions.

Source: IndexBox Market Intelligence Platform