30 January 2001, 15:27  UK economists say BoE rate cut now would be 'dangerous'

ONDON (AFX) - An imminent Bank of England rate cut would be "dangerous", according to the Shadow Monetary Policy Committee of independent economists.
The committee urged the BoE to hold the repo rate at 6.0 pct at its Feb 8 meeting rather than opt for a cut as is widely expected. After examining the state of the UK economy at its quarterly meeting on Jan 18, it concluded no recession is in sight and credit conditions are loose.
"Aggregate demand is still strong. Until a clearer picture of weakening emerges, the unanimous decision of the committee was to keep interest rates on hold."
Expectations of a pending UK rate cut rose last week after the minutes for the BoE Monetary Policy Committee's last meeting showed members voted by a close five to four to stick with 6.0 pct.
Last Friday's weaker-than-expected UK GDP data for the fourth quarter further fuelled rate cut hopes. GDP was up 0.3 pct from the previous quarter and 2.4 pct higher year-on-year, according to preliminary National Statistics figures.

© 1999-2024 Forex EuroClub
All rights reserved