Brexit impact on UK economy 'negative for foreseeable future', Bank of England chief says

Brexit volition person a antagonistic interaction connected the UK's economical maturation "for the foreseeable future", the UK's astir elder banker has warned.

Bank of England politician Andrew Bailey said a diminution successful the UK's imaginable maturation complaint from 2.5% to 1.5% implicit the past 15 years was linked to little productivity growth, an ageing population, commercialized restrictions - and post-Brexit economical policies.

But helium did adhd that the system is, however, apt to set and find equilibrium again successful the longer term.

"Over the longer term, determination volition beryllium - due to the fact that commercialized adjusts - immoderate astatine slightest partial rebalancing," helium added.

Speaking astatine an planetary banking seminar connected Saturday successful Washington DC, Mr Bailey said: "For astir a decade, I person been precise cautious to accidental that I instrumentality nary presumption per se connected Brexit, which was a determination by the radical of the UK, and it is our occupation arsenic nationalist officials to instrumentality it.

"But, I rather often get asked a 2nd question: what's the interaction connected economical growth?

"And arsenic a nationalist official, I person to reply that question.

"And the reply is that for the foreseeable aboriginal it is negative."

However, Mr Bailey did accidental concern successful innovation and caller technologies, including AI, whitethorn assistance code the diminution successful productivity maturation successful the agelong run.

"If we instrumentality relationship of the interaction of ageing and commercialized restrictions, we're truly putting our chips connected investment," helium added.

"We're putting our chips connected general-purpose technology, and AI looks similar the adjacent general-purpose technology, truthful we request to enactment with it.

"We request to guarantee that it develops appropriately and well."

"It doesn't undermine the information that AI, successful my view, is likely, successful addressing this slower maturation issue, that we person and the consequences of it - that it is really the champion anticipation we have, and we truly bash request to bash each we tin to foster it," helium said.

The Bank of England governor's prediction comes arsenic Chancellor Rachel Reeves is nether unit up of adjacent month's budget, with authoritative figures showing muted maturation successful August pursuing a astonishment contraction successful July.

Inflation surge

The Office for National Statistics (ONS) said gross home merchandise (GDP) roseate by 0.1% month-on-month successful August and fell by 0.1% successful July, successful a revision to the erstwhile estimation for nary growth.

In the 3 months to August, GDP grew by 0.3% compared with 0.2% maturation successful the 3 months to July, the ONS said.

The latest figures travel aft the International Monetary Fund earlier this week forecast UK ostentation was acceptable to surge to the highest successful the G7 successful 2025 and 2026.