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Bank of England policymaker: 'economy stronger than it looks'

Published 20 April 2012 by

According to Bank of England policymaker Adam Posen, Britain's economy is healthier than upcoming data will probably show - but the Bank is likely to have a difficult job persuading the public that this is the case, Reuters reports.

Speaking on Thursday to reporters at a banking conference in Edinburgh, Mr Posen, a member of the Bank's Monetary Policy Committee since 2009, said he's confident that the economy doesn't need any further stimulus, following survey data showing an overall upward trend in Britain's underlying growth.

Mr Posen admitted that he had been 'genuinely on the fence' when he voted (in February and March this year) to raise the Bank's 'quantitative easing' target to £350 billion.

Additionally, Mr Posen said he was confident that inflation would return to its target of 2% by the end of 2012. However, consumer price inflation in Britain increased for the first time in six months in March - rising slightly from 3.4% to 3.5% - despite the fact that the Bank predicted that it would steadily fall throughout 2012 to below its 2% target.

A spokesperson for thinkbanking said: "Predictions that the economy could improve in the coming year will come as encouraging news to the vast majority of people, who've seen their finances squeezed as a result of the current economic climate.

"A fall in inflation will spell good news for many savers, for example, who have struggled to get decent returns on their money in recent times, meaning their savings are often becoming worth less as time goes on."

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