UK’s economy remains vulnerable to risks despite recent economic data indicating a strong pick up in activity, Bank of England policymaker Paul Fisher said Wednesday. He cautioned that growth will likely remain weak in the near term and the economy will take a longer time to recover than the United States.
Dismissing the recent positive economic data as insignificant, BoE’s head of markets noted that it is imperative to keep monetary policy loose for a long period to achieve growth that is in line with trend.
Fisher said that the macroeconomic outlook in the U.K. is not as good as in the U.S, where inventors had belatedly realized that a recovery is possible.
Addressing a gathering of business persons, Fisher said that house prices in the U.K. are too high and urged lenders to pass on their lower funding costs on to clients. Terming the government’s Funding for Lending scheme a success, he called for actions conducive to increase the number of transactions in order to raise demand.
In an interview given to The Times earlier the policymaker reserved his comment on his stance on BoE governor Mervyn King’s proposal to split the Royal Bank of Scotland (RBS) into a “good” bank and a “bad” bank. He said that it is possible to privatize the RBS if a two-year program is prepared for the same.