British economy to recover towards year end, BoE says

Date: Friday 21 Sep 2012

The British economy is expected to show more signs of life later this year or in the early part of the next.

That was the prognosis of Bank of England Chief Economist Spencer Dale speaking to BBC Lincolnshire this morning.

"There is some light at the end of the tunnel (…) it is an uncertain light ... but we are hopeful [even if the economic backdrop is still pretty uncertain]," he said.

Somewhat unusually, for what is the norm nowadays, he is apparently not the only one feeling that way. Thus, Martin Taylor –a member of the Vickers commission- writes in today´s Financial Times that, “There is more of a buzz in the air this autumn than for a while. It helps that – to take the most obvious example – the steps taken by the Eurozone to prevent a disorderly collapse are more cogent than before.” This comes as part of an article in which he highlights how banks have been lowering their targets for return on capital, which in turn “should price a lot of business back on to the books.”

In a slightly more muted manner, during a wide-ranging live interview with Channel 4 News, Sir Mervyn King said: "I think the next quarter will probably be up. I think we're beginning to see a few signs now of a slow recovery, but it will be a slow recovery.”

"After a banking crisis one can't expect to get back to normal and I fear it will take a long time."

He also said a lot depends on resolving the Eurozone crisis, which is hanging over the country like a "black cloud".

"After a banking crisis one can't expect to get back to normal and I fear it will take a long time."

Nevertheless, he did also warn that: “[Policymakers] have persisted with trying to keep all the countries in the euro zone ... and tried very hard to keep the show on the road. But I don't think there's any guarantee that they will be able to do that."

AB

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