BoE's growth forecasts too optimistic - Weale
LONDON (Reuters) - The Bank of England's growth forecasts may have been too optimistic, BoE policymaker Martin Weale was quoted as saying on Friday, after data earlier in the week showed Britain entered recession in the first three months of this year.
In an interview with the Newcastle Journal, Weale said conditions had been made worse by the economic downturn in Europe.
Weale's latest comments came after he said in a radio interview on Thursday that data showing Britain's economy contracted for a second quarter running strengthened the case for extending the BoE's quantitative easing programme.
The central bank will publish its next set of growth and inflation projection in May.
"We've been forecasting growth that hasn't materialised," Weale was quoted as saying in the Journal.
"This is a situation which is historically very unusual and as far as we could tell, the economy was in healthier shape than we thought it would be looking ahead from late last year ... but like all forecasts that doesn't necessarily mean what is predicted is going to happen.
"Overall saving and people paying off their debts has meant that consumer spending has been at a low. This is coupled with the fact that many employers are freezing wages while the cost of living is going up.
"It's also made much harder when so much of the rest of Europe is in recession or heading into it," he continued.
"The shrinkage has been much less than one quarter of falling output in 2008," he said. "However, we cannot take things for granted," he added.
(Reporting by Fiona Shaikh)
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