Bank of England deputy governor says UK economy has absorbed energy price shock better than expected

Bank of England deputy governor Sarah Breeden says she has been "surprised" by the UK economy's resilience in absorbing the energy price shock stemming from the Middle East conflict. GDP grew 0.1% in August, beating forecasts of a 0.1% decline, following 0.4% growth in July. Breeden made the remarks at IMF meetings in Bangkok, pointing to business hedging and the global AI boom as key drivers of that resilience.

Firms had "learned the lessons" from the 2022 energy crisis, Breeden said, leaving them better insulated this time.

The August GDP figure delivers a timely boost to the Chancellor ahead of the autumn Budget.

Breeden cautioned that inflation and market volatility are pressing concerns for policymakers, who must continue to adapt their approach.