London - The British economy faces a "bumpy ride" following the September
11 attacks on the United States but will avoid a full- blown
recession, Bank of England Governor Edward George said late on
He added the Bank would will not hesitate to cut interest rates
again to prevent any further economic weakening following the
terror attacks. The bank has progressively cut its key Base Rate to
4.50% from 6.00%, where it stood for most of last
In a speech to business leaders in Wales, George stressed that
it was important not to exaggerate the likely economic effect of
the attacks, and predicted global growth rates would recover over
the next 2 to 3 years once the immediate impact had been
In Britain consumer confidence appeared to be holding up well
although business confidence had weakened, with manufacturing
industry suffering more than the service sector," he said.
"All in all, I am still persuaded on the evidence that we will
avoid the overall recession that is widely spoken of in the media -
though it may be a bumpy ride for a time," George said.
He said the Monetary Policy Committee, which has already cut
interest rates 6 times this year, including 2 cuts since
September 11, would be closely monitoring the economic data to see
if further action was needed.
"If it suggests that the overall economy is weakening
unnecessarily ... then we will not hesitate to ease monetary policy
further to try to reduce that effect," George said. - Sapa-DPA