10 Dec

MPC member suggests recession will be like 1990s

MPC member suggests recession will be like 1990s

Expectations of further base rate cuts in the near future may be strengthened by the comments of one of the people responsible for the decision, Bank of England monetary policy committee member Andrew Sentance.

In a speech yesterday, he said the recession is on course to be of similar severity to those of the mid 1970s, early 1980s and early 1990s.

The comments came on the same day that data from the National Institute for Economic and Social Research indicated that gross domestic product dropped by one per cent in the three months to November.

While the economic news may not be bright, further rate cuts in response to the downturn could lower the cost of mortgages, boosting the housing market and first-time buyers in particular.

Details of how Mr Sentance and each of his colleagues voted this month will be revealed when the minutes are published on December 17th

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