Former Bank of England advisor says UK's recession was 'inevitable'

Former Bank of England advisor says UK's recession was 'inevitable'
Georgia Pearce

By Georgia Pearce

Published: 15/02/2024

- 12:28

A leading economics expert has said the news the UK is officially in recession isn’t a shock.

Roger Gewolb believes it was ‘inevitable’ that the UK was going to enter a recession, but ‘people shouldn’t be too concerned about it.’

The former advisor to the Bank of England told GB News: “People are saying it's going to be short lived, but it was inevitable. I've been saying this would happen for a long time simply because the 14 interest rate rises were going to push us there. It slows down business, it slows down growth, it slows down investment.

“It actually perpetuates inflation and actually grows inflation and prolongs the time it takes for our kind of inflation, non consumer driven or what they call ‘cost push inflation’ to fall.

“That always falls by itself. Because raising interest rates doesn't really control food prices, or materials and services or fuel. Raising interest rates really does nothing to prevent that but it does slow the economy down. It wasn't a shock.

“I think it's probably a bit of a blip. And I wouldn't be too concerned about it. I would see it against the background of things. Like the Resolution Foundation Think Tank report said the British economy has been in the doldrums for over 15 years. We really haven't gone anywhere in all that time.

“Our labour productivity is very low, our infrastructure is falling apart in places. YI think that we have a lot of problems to solve, which obviously are being worked on. And this I think, is a momentary blip. This is not part of our fundamental issues that we're all struggling to overcome.

“When you look in the mirror on a morning, like this morning and go, ‘Oh, gosh, we're in recession. It doesn't really affect your life too much. It takes a long time for that to work through businesses, cutting back their investment, and then all the things that come from that. This is not a tragedy. It could reverse in the next quarter, or the next quarter or the quarter after that.”


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