Bailey Flags Economic Uncertainty Amid Softening Labour Market

Bank of England Governor Andrew Bailey has raised concerns about the UK's loosening labour market and the broader uncertainty in the global economy that have been significantly affecting economic growth and investment decisions.

In recent remarks to CNBC, Bailey underlined the potential of a weakening labour market to mitigate inflation pressures, although he emphasized the prevailing economic risks over inflation threats. Bond yields in Britain recently fell to a near two-month low, reflecting predicted economic activity slowdowns, as Bailey noted from Sintra, Portugal.

Business feedback reveals delayed investment decisions, despite Bailey's outlook that interest rates will gradually decline. With an eye on the next BoE meeting, Bailey noted ongoing global economic uncertainties and signalled potential changes to the bank's quantitative tightening approach, amid pressures from a weaker jobs market and geopolitical tensions.

(With inputs from agencies.)