UK economy may fall back into recession

UK economy is under the threat of repeated recession

In brief: One of the Bank of England's seniors says that the UK economy may fall back into recession.

UK economy is currently in a stage of moderate recovery, though it is still possible for it to fall back into recession, said one of the Bank of England’s seniors Adam Posen this Wednesday.

He also emphasized that he is currently opposing the toughening of money-and-credit policy. In his London speech, Pozen said that to his opinion the economy is trapped in between the two possible outcomes – the first, sustained by budget savings for Europe, is going to negatively affect the GDP growth and the other is based on the restoration in the rest of the world. “If we have good luck, our current monetary policy combined with the natural tendency of the UK economy toward recovery and strong growth outside Europe will lead to good results”, – he said. Posen also noted that inflation in the country is higher than expected, despite the deflationary pressures, and said that one cannot treat it simply, putting in line with other macroeconomic factors. “However, we do not have to tighten our policies despite the rise in prices as forecast still says it will soon decline and economic recovery still looks fragile” – said Posen.

Olga Bespalova
2010-06-30 13:46, Economics.

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