Prospects for the economy are far better than those prevailing during earlier recessions in the 1970s, 80s and 90s, despite turbulence in financial markets, according to Andrew Sentance, a member of the Bank of England’s monetary policy committee.
The outlook now is merely for weaker growth, not meltdown, he said in a speech last night to the Leicester Chamber of Commerce.
Sentance’s remarks suggest the MPC remains deeply divided over whether a near-term move to cut rates is needed to prevent the economy from sliding deep into recession. The speech contradicts the views of fellow MPC member Sir John Gieve, who earlier this week warned 'we must be careful not to underestimate the deflationary consequences of the credit crisis', which prompted speculation a rate cut might be coming.
Sentance set out a robust defence of the MPC’s approach to fighting inflation and sought to counter critics who have cast it as overly concerned with controlling prices. He noted that press commentary occasionally portrayed the MPC as, 'inflation nutters'.