Our Policy Has Been the Right One, Says Chancellor; Economic Growth Is on Target
Chancellor Mr Gordon Brown said yesterday he was confident his growth forecast for the economy would be achieved this year and urged other countries to contribute to global recovery.
Mr Brown, in Washington at a meeting of Finance Ministers from the Group of Seven leading industrial countries, also, unusually, heaped praise on the Bank of England.
"Our policy has been the right one and we still see the economy growing at 1-1.5 per cent this year," he said.
Figures released last week showed the economy grew a scant 0.1 per cent in the first quarter, although growth is widely expected to pick up later this year.
Mr Brown would not be drawn, however, on whether the economy had now passed the trough of the current economic downturn. "I have said over the past year and a half we must steer a course of stability.
"We have sound monetary policy based on Bank of England independence and we have steered a course of stability with fiscal policy."
He complimented the Bank of England, relations with which have not always been cordial in the two years since it was handed responsibility for interest rates.
"I believe that making the Bank independent was the right thing to do.
"The Bank of England has a very good record to talk about over the last two years."
The Bank has slashed rates over the last seven months by 2.25 per cent to the current level of 5.25 per cent, which has led to a pick-up in consumer and business confidence and averted a recession.
The Monetary Policy Committee meets again next week to consider whether it can allow a further interest rate cut.
On the international economy, Mr Brown urged other European countries, as well as Japan, to do their bit to contribute to a fledgling global upturn. …