LONDON – UK Business Secretary Vince Cable has said that
Bank of England policy can help provide support to the UK recovery
if fiscal policy weakens the economy too much.
In an interview with the BBC, Cable said that the government did
not need a ‘Plan B’ despite today’s shock GDP data which showed the UK
economy contracted by 0.5% in the final quarter of 2010.
“When you ask about Plans A and Plans B, built into Plan A is, of
course, fiscal policy, action on the budget, and monetary policy, the
actions of the Bank of England,” Cable said.
“Of course its decisions are independent, but the Bank of England’s
decisions will reflect the underlying state of the economy,” Cable
added.
“That provides flexibility to what we are doing,” he continued.
In an earlier interview, Cable reiterated his support for the
government’s deficit reduction plan
“The government isn’t going to change its strategy, it’s absolutely
right. We inherited a very weak economy with an enormous budget deficit
if we weren’t dealing with it we’d be in a major fiscal crisis,” Cable
told Sky News.
–London bureau: +4420 862 7499; email: wwilkes@marketnews.com
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