UK Minister Cable: Monetary Policy Should Offset Demand Shock

LONDON – UK Business Secretary Vince Cable has claimed that
the “government” could move to stimulate demand through monetary policy
if the economy remains weak, adding that the coalition will not slow the
pace of its deficit reduction plan.

“We’re not talking about changing our position on the budget, we’ve
committed ourselves to a very tough spending program over the next few
years,” Cable told BBC News.

Cable said that the demand shock could be eased by “Using whatever
instruments government has to hand, particularly monetary policy as a
way of getting the economy going.”

Cable’s comments are somewhat misleading as the government has been
unable to set the UK’s monetary policy stance since Labour Chancellor
Gordon Brown granted the Bank of England operational independence in
1997.

–London bureau: +4420 862 7499; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,M$$BE$]