BOE’s Kate Baker in an article in the Northern Echo newspaper says UK growth may not start until the end of 2009, but sterlings’ weakness should help exporters.
Baker says “While this may be a deep recession, it is being combated with some powerful measures and positive factors. Even so, growth may not resume until towards the end of this year.”
Baker feels that the economy should get a boost from the low level of BOE rates, which have been cut to 1% from 5% in October. She feels “other helpful factors include the fall in sterling, now down 25% since the credit turmoil started, which will increasingly bring about the replacement of imports by goods and services produced in the UK.”
The comments will not help cable which has fallen to a days low of 1.4255 at writing.