Bailey Signals Economic Caution Amid Global Uncertainty

Bank of England Governor Andrew Bailey has sounded the alarm on the UK's softening labour market, attributing it to rising global economic uncertainty. In a candid interview with CNBC, Bailey noted this uncertainty has adversely affected economic growth and investment intentions.

Despite placing emphasis mostly on the risks to economic growth, Bailey assured that the Bank of England is vigilantly monitoring inflation trends. Short-dated British government bonds responded by touching a near two-month low following his comments.

Bailey indicated that the central bank is likely to gradually lower interest rates. Addressing the steepening of the UK government's bond yield curve, he linked this to global economic uncertainties while reinforcing confidence in the country's debt stock.

(With inputs from agencies.)