Top Bank of England economist dismisses triple recession fears

Tim Wallace
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CONFIDENCE is improving, exports are on the up and large swathes of the economy are growing relatively strongly, the Bank of England’s Ian McCafferty said yesterday, dismissing the threat of a triple dip recession.

Combined with a gradual improvement in credit conditions fuelled by the Funding for Lending Scheme (FLS), the monetary policy committee member believes the economy is beginning to pick up.

“If we adjust overall GDP growth for the sharp falls in construction and North Sea oil output, the rest of the economy – over 90 per cent of GDP – grew by 1.2 per cent last year,” McCafferty told the Coventry and Warwickshire Chamber of Commerce’s Women in Business conference.

“I do not wish to sound complacent; growth of even 1.2 per cent across much of the economy is still at best a slow and difficult recovery. But it is also somewhat removed from the reports of semi-permanent, triple dip, recession.”

However, McCafferty also warned he remains concerned about above-target inflation hitting households’ spending power and so further dragging down growth in future.