LONDON (MNI) – The UK economy looks likely to have expanded in the
first quarter, performing better-than-expected, Bank of England Monetary
Policy Committee member Martin Weale said Friday in an interview with
the Bath Chronicle.
The MPC member, who voted against further quantitative easing at
the March meeting and has warned that a rate hike could come sooner than
markets have been pricing in, said that the quarterly growth pattern
would be choppy this year, with the Queen’s Jubilee and the Olympics
clouding the picture. After contracting in the fourth quarter of 2011
the economy, however, appears on track to avoid a technical recession.
“In the first quarter of this year things have been better than I’d
anticipated. I think it’s more likely than not that growth will be
positive,” Weale said.
He added that there would be “quite a bit of disruption to the data
because first we have the Diamond Jubilee, then the Olympics. The
numbers … will jump around and it will be difficult to know
what to make of them until we have a more stable picture late this year,
and maybe not until the first quarter of next year,” Weale said.
He expects normal economic growth to resume in the medium term.
Weale predicts consumer spending will continue to be weak. His view
on the consumption outlook is supported by Thursday’s retail sales data,
which saw volumes fall sharply in February, with revisions showing the
previously reported boom in January sales was illusory.
The MPC member also said that local businesses had come to terms
with the fact “uncertainty is the new normal”.
— London Bureau +20 7862 7491; drobinson@marketnews.com
[TOPICS: M$$BE$]
