LONDON (MNI) – Bank of England Deputy Governor Charles Bean, in an
interview in the Times newspaper, made the case for delaying policy
tightening until it was clearer how strong the recovery is.
Bean talked about the recent soft activity data and said it might
be indicative of a lengthier slowdown and made clear he wanted more
evidence on what was going on before deciding to alter policy.
Fourth quarter GDP showed a shock contraction and Bean highlighted
the uncertainty over whether it was a temporary setback or something
more troubling.
“The questions is does that indicate the recovery running out of
steam or not ? It could just be rogue data, it could just be a temporary
soft patch. We know economies often go through soft patches during
recoveries,” Bean said.
“But it might indicate a more durable slowing, possibly connected
with people becoming more concerned about the impact of the fiscal
consolidation,” he said.
“Now at this stage we don’t have a really good handle on that. So
certainly, from my perspective, I think it is appropriate to wait until
we have got a better handle on what the underlying strength of the
recovery is,” Bean said.
–London bureau: +4420 7862 7491; email: drobinson@marketnews.com
[TOPICS: M$B$$$,M$BDS$,MT$$$$,M$$BE$]
