BoE 'prepared for euro collapse'

29 May 2012

Britain looks set to experience another round of monetary stimulus and lower interest rates should the euro fail.

That is if comments made by Dr Ben Broadbent, a member of the Bank of England's Monetary Policy Committee (MPC), who has insisted officials at the central institution are prepared to react to such a development on the continent.

During a speech delivered at Bloomberg, Dr Broadbent indicated the Bank is ready to intervene if necessary to make sure the end of the economic bloc does not have a major impact on the British financial system.

"Fears have increased of a rare but bad economic outcome. These heightened fears may already have been affecting the growth of UK activity, investment and productivity for some time," he admitted.

However, the MPC official went on to say that while they are effective and necessary, such policy alterations have their limits, meaning the most important decisions affecting the UK are still being made elsewhere in Europe.

By Asim Shah

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