BoE's Barker asks if rate cut needed

Mon Oct 29, 2007 8:37pm GMT
 
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NEW YORK (Reuters) - The question for policy-makers is whether things have changed so much in Britain's economy since August that interest rates need to come down, Monetary Policy Committee member Kate Barker was quoted as saying on Monday.

In an article published on the Guernsey Press and Star's Web site, Barker was reported to have said that there had not been much change in attitudes since the disruption started in financial markets on August 9.

"We are asking ourselves if things are so different from August and do we actually have to cut rates?" the report quoted her as saying.

The BoE's rate-setting committee meets next week and most economists expect it to leave interest rates unchanged at 5.75 percent, given recent economic figures have been strong.

A number of analysts, however, are predicting the central bank will choose to cut interest rates in order to reduce the risk of the turmoil in financial markets hitting economic growth.

 
A share trader is pictured behind a mock one dollar bill and a mock 500 Euro note symbolizing a consumer credit note, at the German stock exchange in Frankfurt, December 18, 2008. REUTERS/Kai Pfaffenbach
Credit headwind

News headlines speak of recovery, but financing is still a big problem in Germany. The dearth of credit to tide firms over is frustrating policymakers, who are blaming reluctant banks and there is little agreement on how best to increase lending flows.  Full Article 

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