14-02-2008
Bank of England governor concerned about economy
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
The current governor of the Bank of England, Mervyn King, has issued a warning over the possible direction of the UK's economy.
While highlighting the current inflationary risks - and their corresponding impact upon the ability to reduce interest rates - Mr King has confirmed that the UK's economy may enter a period of recession over the course of the year.
It was also confirmed that while consistent house prices have been predicted, it is still possible that they may fall.
"We are moving into territory where there is greater uncertainty than ever," said Mr King.
"The challenge for the MPC (monetary policy committee) is to balance two conflicting risks … A sharper slowing in activity would threaten to pull inflation below the target."
It was also noted that a reduction of interest rates to 4.5 per cent would push inflation past the three per cent threshold.
Mr King's comments were made during a news conference in London.