Bank of England policymaker Martin Weale said in an interview with Reuters Insider television today that he believes the outlook for Britain’s economy has worsened in recent weeks and the risk of a double-dip recession is higher than in July.
“Looking at what’s happened in the last two months or so anyone would have to say that it (the risk of recession) is greater than it seemed in July,” Weale said.
“So when I come to the October meeting I will have to form view about what is the bigger risk -the high level of inflation that’s well above target and has been well above target for a long time or the fact growth prospects do seem to have worsened in the last few weeks,” he added.
He mentioned that inflation was still a problem not all recent news pointed towards a significant undershoot of the Bank’s inflation target in the medium-term horizon, necessary to warrant more quantitative easing.
“I would consider more asset purchases were warranted if it seemed likely that inflation was substantially going to undershoot the target,” he said.
Weale indicated that he was not fully convinced of the need for further quantitative easing. “I think I can say that there are inflationary issues as well as growth issues,” he said.