Bank of England (BoE) policymaker Megan Greene said on Friday that they are not sure if the weakness in the UK economy is caused by demand or supply, per Reuters.
Key takeaways
“More worried about supply, really weak productivity growth.”
“There are concerns about impact of the government’s budget changes.”
“We have no idea what US tariffs will look like when the dust settles.”
“The risk is now on the disinflationary side because of tariffs.”
“We are seeing an output gap open up which should help bring inflation back to target.”
“We should see some trade diversion coming from China.”
“Slight concern that inflation expectations show people more worried about inflation.”
“UK labour market has been weakening pretty slowly but we should see wage growth come down.”
Market reaction
GBP/USD largely ignores these comments and was last seen losing 0.2% on the day at 1.3310.