20 March 2001, 15:07 Brown says 'absolutely no doubt' U.S. slowdown will affect UK
LONDON (AFX) - Chancellor of the exchequer Gordon Brown said there
is "absolutely no doubt" that the U.S. downturn will have an eventual
impact on economic growth in the UK.
But he said the reduction in export earnings will be more than
matched by increased consumer spending.
Questioned by the House of Commons' treasury select committee,
Brown also said the eur/stg exchange will "move to reflect the
fundamentals of the economy" over the medium term.
He noted that sterling had come down slightly but would not be
drawn into "day-to-day speculation about what the right rate should
be".
Asked if the Bank of England's monetary policy committee has
further scope for further rate cuts, he said it would approve of the
fiscal tightening in his March 7 budget.
"It has taken a proactive stance on the economy. Equally, the
fiscally tightening that has been locked in in the budget is I think
something that they will approve of."
The BoE will tomorrow release the minutes of the last MPC meeting
which are expected to give pointers as to future rate cuts.
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