Andrew Bailey on global economy
From WATCH HEARING NOW: Bank of England Governor Bailey Faces House of Lords Economic Committee | AC14 · · DWS News
“There are really two stories going on in the world economy at the moment. Um so, we've talked about the obviously the impact of the conflict in the Gulf, the effect on on energy prices. So, that is that is the first story. The second story is the, if you like, the AI tech story. Um much bigger story in the US, but it's but it's but it's having sort of again repercussions for the rest of the world. And you And this I think is the way to square what otherwise appears to be the paradox that we're seeing in financial markets. Because what we're seeing is that, if you look across the major markets, take it in three parts. Um the impact of the Gulf and the energy shock is almost entirely focused on particularly debt markets and particularly government bond markets uh and yields. Exchange rates are actually relatively little affected. Now, that is not illogical if this is a global shock. And then the third one is sort of risk markets or equity markets and credit spreads, which for If you only If you spend out your If you spend your life only looking at those, you'd you'd you would not realize there was any event going on in the Gulf.”
On , Andrew Bailey, Governor at Bank of England, spoke about global economy during WATCH HEARING NOW: Bank of England Governor Bailey Faces House of Lords Economic Committee | AC14 on DWS News.
About Andrew Bailey
Andrew Bailey, Governor of the Bank of England, appeared before parliamentary committees and spoke at conferences in recent months, addressing the UK economy, monetary policy, and financial stability. In April 2026, the Monetary Policy Committee held interest rates at 3.75%, a decision Bailey described as an "active hold" rather than a passive wait-and-see approach, given significant uncertainty. He stated that the path of the energy price shock, driven by the conflict in the Middle East, was "very uncertain" and that a prolonged spike could lead to higher rates, while a prompt end to the conflict could lead to a more benign scenario. Bailey also noted that the MPC had "in effect tightened policy" and that there was "a bit of time" before acting on second-round effects. Bailey discussed a range of other topics, including artificial intelligence, private credit, and trade. He said that UK banks did not yet have access to the AI model Mythos, but expressed optimism they would soon have access to other models. On private credit, he described it as "playing an important role" and "a good thing," but cautioned that it is "connected into the broader system" and that regulators need to understand those interconnections. He also stated that "tariffs are not the answer" to the scarring effects of China's entry into the world trading system, and that preserving a freer trade system is "very important." Bailey emphasized the importance of central bank independence, saying it is "very important" because central banks must take decisions over a longer time frame than electoral cycles.