LONDON (MNI) – The UK economy has been basically flat over the last
two years, Bank of England Monetary Policy Committee member Paul Fisher
was quoted as saying Thursday, adding that there were signs that the
BOE’s Funding for Lending scheme was working.
“I don’t think there has really been one [double dip recession]…
The economy has basically been flat for two years… If you strip out
all the quarter by quarter movements caused by special factors, the
underlying figure is just flat,” Fisher is quoted by the Western Mail
newspaper as having said.
Recent official GDP readings have shown the economy mired in the
longest double-dip recession since the second world war but many
analysts have said that the contractions are a result of one-off factors
and the underlying picture is one of flattish growth.
On the BOE’s Funding for Lending Scheme which provides cheaper bank
borrowing costs providing they pass on lower lending rates to companies
and consumers – he said that although it was too early to gauge its
impact, there were already signs that it was having the desired effect.
“First of all, we are seeing a fall in bank lending costs across
the whole spectrum. Libor rates [very short-term interbank lending
rates] are down 60 basis points… Any firm that has a floating rate
loan linked to Libor, is automatically enjoying now a 50 to 60 basis
points decrease in its interest payments,” Fisher said.
He added: “Even if lending doesn’t increase, there will be quite of
lot of benefits in lending rates having come down.”
–London newsroom: 00 44 20 7862 7492;e-mail: ukeditorial@marketnews.com
[TOPICS: M$B$$$,M$$BE$]
