Policymaker says another recession is likely

| October 28, 2011 | 0 Comments

Bank of England policymaker Paul Fisher has today said Britain is likely to suffer another recession.

His comments come just a few days after fellow Monetary Policy Committee (MPC) member, Martin Weale, warned that a contraction in the fourth quarter is possible.

Returning to Mr Fisher, he was asked how likely a double dip recession was and he replied: “I think it is a significant chance.”

However, Mr Fisher told Bloomberg TV that the recent announcement by the central bank to inject a further £75 billion into the economy via its quantitative easing (QE) programme, should help prevent a recession.

He said: “Hopefully it will put some confidence, some dynamism, back into the economy to help support it going forward.”

He also highlighted that the Bank of England was prepared to introduce more QE if necessary.

However, earlier this month, leading think tank, the Ernst & Young Item Club, warned that the latest round of QE is unlikely to boost the recovery.

Its comments came just a week after the British Chambers of Commerce (BCC) said the fresh round of QE may not be enough to prevent the economy from slipping back into recession and “more radical measures” are required.

Britain’s last recession ended in mid-2009 but since that time, the economy has hardly grown and many leading business groups continue to download growth prospects for the economy.

Unemployment is rising, while inflation continues to surge which is hitting consumers’ ability to spend and this is impacting negatively on the economy.

In the meantime, fellow policymaker Adam Posen, is also pessimistic about the economic prospects and said growth is set to remain very weak.

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