Bank mulls UK rate cut

Sir Edward cannot rule out a further economic slowdown

The Bank of England would cut interest rates again to prevent a UK recession if economic statistics suggested the threat was rising, governor Sir Edward George has confirmed.

I am still persuaded on the evidence that we will avoid the overall recession that is widely spoken of in the media

Sir Edward George
Bank of England

"We cannot rule out a further slowdown here in the UK," he said, insisting that the bank's rate-setting Monetary Policy Committee (MPC) would implement cuts if required.

"If [data] suggests that the overall economy is weakening unnecessarily... then we will not hesitate to ease monetary policy further to try to reduce that effect," he told business leaders in Swansea.

Sir Edward remained confident that a recession can be avoided.

"I am still persuaded on the evidence that we will avoid the overall recession that is widely spoken of in the media, though it may be a bumpy ride for a time," he said.

Growth

Global growth rates would recover by 2004, Sir Edward predicted, urging his audience to be cautious and not exaggerate when considering the attacks' effect on the economy.

The Bank has cut rates six times this year

At home, UK consumer confidence was holding up well, he added, though he acknowledged that business confidence had slipped.

The manufacturing industry had suffered more than the service sector, he pointed out.

The MPC has cut interest rates six times so far this year, twice since 11 September.