Soaring inflation will hit the UK harder than any other major economy during the current energy crisis, the governor of the Bank of England has warned. Andrew Bailey has said that Britain's economy would likely weaken earlier and be more intense than others as a result of the energy price shock that all European economies faced.
The situation was further exacerbated in this country by the “structural legacy” left by Covid in the labour market as companies struggled with a shortage of workers. Mr Bailey told a European Central Bank (ECB) conference in Sintra, Portugal: “Unfortunately, there is going to be a further step-up in UK inflation later this year because that’s a product of the way the energy price cap interacts with the energy prices we have observed over the last few months. I think the UK economy is probably weakening rather earlier and somewhat more than others.”
