LONDON (MNI) – Bank of England Deputy Governor and Monetary Policy
Committee member Charlie Bean has welcomed the strong UK Q3 GDP outturn
as ‘good news’ but warned that the bigger picture is one of an economy
‘bumping along the bottom’.
Speaking in an interview with the Murnaghan program on Sky News,
Bean said that the 1.0% q/q growth reading was stronger than the bank
had been expecting.
“But we should avoid getting over-excited. About half of it was
simply due to recovery from the second quarter when output was depressed
because of the extra bank holiday for the Jubilee,” Bean said.
“On top of that there was a fillip from the Olympics which will go
away when we go into the next quarter so it is quite possible that we
might see weak growth in the fourth quarter. The big picture here really
is of an economy that has been bumping along the bottom,” he added.
Bean also said that some of the headwinds facing the UK economy
should soon ease.
“We do think there’s reason for some optimism going forward. Some
of the headwinds we’ve been struggling against in the past couple of
years will be abating somewhat,” he said.
“We know there’s one or two unwelcome things to come through.
Utility prices are going up again this autumn and probably a spike in
food prices because of the unusual weather but generally speaking real
household income won’t be squeezed quite as much,” he said.
Turning to discuss the succession of the governorship at the BOE,
Bean said that he has told the UK Treasury that he is not interested in
taking over from Mervyn King.
“What I have said is that if it’s helpful to the new governor for
me to stay on for a little bit to smooth the transition and to avoid all
the top brass at the bank turning over at the same time, I’m happy to
stay on for a little bit,” he said.
–London newsroom: 4420 7862 7491 e-mail: wwilkes@marketnews.com
[TOPICS: M$B$$$,M$$BE$]
