Downing Street Says

» Wednesday, December 17, 2008

Economy

Asked if there was any reaction to the American reduction in interest rates, the PMS replied that as people knew, monetary policy was for the Bank of England. Put that Barack Obama had expressed the concern that if interest rates came close to zero, monetary policy became ineffective and did the Prime Minister share this view, the PMS said that as the Prime Minister had made clear in the past, we would do all we could to get the economy through this difficult time and to help businesses and families. That included a range of measure, one of which was a fiscal stimulus.

Put that the Governor of the Bank of England suggested that a greater stimulus or a further package might be needed, the PMS replied that the Chancellor had set out the Government s response in full.

Put that Tony McNulty had said that we had not reached the bottom of the bad news in regards to employment and how much worse did the Government anticipate it was going to get, the PMS said that he would not be forecasting unemployment. The PMS added that the point Tony McNulty was making was that the statistics had a degree of lag to them as they referred to a previous period. More broadly, the Government s economic forecast was set in the PBR.

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