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Thursday, 26 February 2009

British Pound Tumbles as BOE's Blanchflower Says Recession May Worsen 'Significantly'

`The British pound remains under pressure as Bank of England (BOE) Monetary Policy Committee (MPC) member David Blanchflower issued extremely bearish commentary on the UK economy. Blanchflower said that the UK recession may worsen "significantly" and that the downturn has not yet hit a "bottom," which left UK monetary policy "overly restrictive" with the Bank Rate at a record low of 1 percent. He went on to say that the central bank should cut rates to at least 0.5 percent, go neutral and then pursue quantitative easing "quickly," something that the UK Treasury has yet to approve. It is worth noting that Blanchflower is easily the most dovish member of the MPC, but his remarks obviously still hold some weight in the markets. 


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