Members of the Bank of England Monetary Policy Committee seem (wisely) to be hedging their bets.Last Friday committee member David Walton expressed reservations about the recent BoE economic forecasts and today it is the turn of Stephen Nickel in an interview with the Financial Times. He warns that there is a “serious risk” that economic growth will fall short of the Bank of England's forecast, forcing further interest rate cuts.
In an interview Mr Nickell said consumer expenditure growth was being curtailed by high oil prices, increasing slack in the labour market and high levels of household debt. There was also a possibility that household savings rates would rise, denting consumption growth
Guess what? He's right, these are the problems. I'm sure New Economist will also be ruminating carefully on what may or may not be about to happen next.
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