20-02-2008
MPC member issues economic warning
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
A member of the Bank of England's monetary policy committee (MPC) has issued a warning over some of the threats faced by the UK's economy.
Kate Barker has announced her belief that, over the short term, the UK economy faces the impact of a decline in overall mortgage lending levels, in addition to the continued weakening of house prices.
"The risk I believe to be of most concern is around the interplay between the property market and the financial sector resulting from the credit turmoil," said Ms Barker.
"The consequent adverse impact on growth could prove difficult to turn around quickly, potentially resulting in a protracted period of low output growth and below target inflation."
Ms Barker made her comments while speaking at the North Staffordshire Chamber of Commerce.
It was also noted that inflationary pressures would impact upon the ability to lower interest rates.
The MPC will next announce its interest rate decision around March 6th.