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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 year.
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 absorbed.
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
