BoE official expects further contraction

14 December 2011

The British economy could be facing another period of contraction prior to being lifted once again towards the latter stages of next year.

That is the opinion of Spencer Dale, chief economist at the Bank of England (BoE), who believes further declines are likely for at least another three months as the nation continues its struggle in the midst of the eurozone debt crisis.

During an interview with Bloomberg, Mr Dale explained: "If I expect to see broadly flat growth, there must be a possibility that I will see one or two quarters of negative growth."

Yesterday (13 December), it emerged that inflation in the UK decelerated to 4.8 per cent in November compared to the figure of five per cent one month previously.

And the BoE official noted this could be a sign the figure will dip towards the targeted level sooner rather than later.

Last week, the BoE's Monetary Policy Committee opted to keep central interest rates at 0.5 per cent.

By Asim Shah

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