Update: BOE Bean: UK GDP "Almost Certainly" Contracted In 2Q
LONDON (Dow Jones)--Bank of England Deputy Governor for Monetary Policy Charlie
Bean said Tuesday that U.K. economic activity "almost certainly" shrank in the
second quarter.
Bean was speaking to business people in Birmingham during a nationwide tour to
explain the bank's unconventional policy of quantitative easing, through which
it is buying GBP125 billion of public and private sector securities with
freshly created central bank money.
"The GDP figure that's due out at the end of this week will still show almost
certainly a negative figure," Bean said.
Economists polled by Dow Jones Newswires expect data Friday to show that U.K.
gross domestic product contracted by 0.3% on the quarter and by 5.2% on the
year in the April-June period, marking a big improvement on the 2.4% quarterly
and 4.9% annual drops in the January-March period.
The deputy governor has said repeatedly during his tour that he regards the
U.K. economic picture as being broadly unchanged from the time of the bank's
last quarterly Inflation Report in May.
The central bank regarded the pre-crisis strength of sterling as unsustainable
and welcomed the decline in the currency over the past couple of years as a
means of rebalancing supply and demand in the economy and supporting exports
amid the global downturn.
Bean's comments suggest the BOE continues to see the pound's weakness as
largely positive.
"What we wouldn't be particularly pleased to see is a strong recovery of
sterling from where it is," Bean said. "We would certainly hope that we don't
see a bounce back to where it was a couple of years ago."
(END) Dow Jones Newswires
July 21, 2009 11:56 ET (15:56 GMT)
