Bank of England deputy says she is 'surprised how well' UK economy has absorbed the energy price shock
John Healey, whose Autumn Budget in two weeks must address a cost of living crisis, as the economy grew just 0.1% in August — far below the summer's 0.4% pace.1% August growth figure, which came in below some forecasts but still exceeded the predictions of analysts who had expected a flat reading.
Bank of England Deputy Governor Sarah Breeden said she was caught off guard by the UK economy's resilience after GDP grew 0.1% in August, beating forecasts of a 0.1% contraction. Breeden credited businesses for hedging against energy costs rather than passing them on to consumers, a marked contrast to the 2022 shock. Chancellor John Healey welcomed the figures as a Budget boost, though Labour reportedly cannot claim credit for the improvement.
Breeden pointed to the AI boom as a second driver of growth, with firms investing in data centres and adoption plans.
Financial markets are now pricing in a near-certain quarter-point interest rate rise when the Bank's Monetary Policy Committee meets on 5 November.
The TUC is pressing Healey to use the Budget on October 28 to hit the big four banks with a surcharge hike of at least £9bn over four years to cut energy bills.
