November 28, 2001	Wednesday	Ramazan 12, 1422

LONDON, Nov 27: Britain’s economy will escape a recession despite slower economic growth in coming quarters, leading members of the Bank of England’s Monetary Policy Committee said on Tuesday.

“It’s a very, very small chance of recession,” Bank of England governor Sir Edward George told a parliamentary committee, pointing to the supportive influence of higher consumer and government spending.

His stance was echoed by the Bank’s Deputy Governor Mervyn King, who told members of the Treasury Select Committee that the economic slowdown could be relatively short-lived.

“We have seen a much faster growth rate in the third quarter... we do expect quite a slowing of growth in the next two or three quarters, before the economy starts to pick up,” King said.

Britain’s growth outlook contrasts with the United States, which has sunk into recession and may be slow to re-emerge.

The nine-member MPC, which meets monthly to set interest rates for the economy, recently forecast just a one-in-10 chance of a full year decline in economic output in Britain. George said the Bank was “consistently puzzled” by the sustained weakness of the euro and the strength of sterling against it.

He added that this was unlikely to persist in the long term, though he had “no means of judging when that is likely to happen” and said the MPC could do nothing to directly influence the exchange rate.

The MPC voted eight-to-one to cut interest rates by half a per centage point to 4 per cent earlier this month with one dissenter, Ian Plendeleith, preferring a quarter point cut.

That rate cut was the seventh the MPC has made since the beginning of the year and the third since the September 11 attacks on the United States in a bid to shore up confidence in the face of a deteriorating global economy.

In the main budget last March, Brown forecast British economic growth of 2.25-2.75 per cent for this year and next. While the lower end of that range may just about be achievable for this year, the world economic slowdown, compounded by the events of September 11, means he will have to cut next year’s forecast.—Reuters