Andrew Bailey: UK ‘Must Not Forget’ 2008 Financial Crisis Fallout

• The BoE cut interest rates to 4.5% from 4.75% and warned of “stagflation” amid looming recession woes in the U.K.
• PM Keir Starmer claims the U.K. didn’t copy the U.S. decision not to sign a global declaration on AI in Paris.
• The U.K. Chancellor of the Exchequer is leading efforts to deregulate and drive growth in U.K. markets.

The Bank of England (BoE) Governor, Andrew Bailey, has urged U.K. policymakers to move cautiously as the wheels of deregulation begin turning in the U.S.

Citing the 2008 global financial crisis (GFC), Bailey noted a trend of deregulation, or at least a “reaction” against regulation currently taking place.

The U.K. Must Remember 2008

In a speech delivered to the London campus of the Chicago Booth School of Business on Feb. 11, 2025, Bailey reminded audiences that deregulation in hopes of rapid growth can have negative consequences.

“We must not forget the lasting damage done by the GFC. There is no trade off between economic growth and financial stability.”

In a recent speech, Rachel Reeves described the government’s strategy to “systematically remove” barriers facing investors and businesses that “drive economic growth.”

Contrary to Bailey’s position, Reeves has said that post-GFC regulations have gone “too far.”

In his speech, Bailey argues that regulations are essential, and the role of regulators is increasingly important as financial markets rapidly evolve. He notes:

“The market looks very different to what it was only five years ago. It involves large shifts in leverage, pricing power, speed of trading and liquidity provision.”

Notably, Bailey stressed that the commitment to financial stability should not be abandoned or compromised in pursuit of rapid growth, as hasty decisions now may yield trouble later down the road.

U.K. Follows U.S. at Paris AI Summit

Bailey’s words follow the Paris AI Summit, at which the U.K. and the U.S. failed to sign a global declaration for “sustainable and inclusive” regulations and initiatives around AI.

The move prompted some observers to assume the U.K. would be following along with the U.S. as Donald Trump’s administration works to deregulate U.S. markets.

Prime Minister Keir Starmer has refuted such speculation. A government spokesperson, cited by the Guardian, said the U.K.’s decision not to sign the declaration was independent of the U.S. as they were unaware of the U.S.’s “reasons or positions.”