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Recession could be past the worst
After a set of more optimistic figures regarding UK banks’ view on lending to clients appear to be more favourable, the newest member of the Bank of England’s’ Monetary Policy Committee has suggested the worst of the recession could be over.
The former advisor to Morgan Stanley, David Miles, suggested the worst of the “very deep recession” was over, highlighting the fall in the value of sterling, which could help improve exports and the departure of foreign banks from the UK.
He also hinted at the prospect of an increase in interest rates and a reversal of the Bank’s quantitative easing. The Bank is putting almost £125 billion into the economy buying back toxic debts from other lenders as it tries to stimulate the economy.
In the latest survey of credit conditions, published on a quarterly basis, there was an indication that lenders are expecting make credit more freely available to companies and consumers over the next three months.
The Bank of England said it expected the demand for loans to be limited but they fully expected banks to be making credit more freely available. A spokes man for the bank said “We will not know for sure whether QE has been directly effective in supporting nominal demand for growth for some time and a definitive assessment right now would certainly be premature”
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