Newspaper article The Evening Standard (London, England)

Bank's Deputy Governor Dismisses Deflation Threat

Newspaper article The Evening Standard (London, England)

Bank's Deputy Governor Dismisses Deflation Threat

Article excerpt

Byline: Lucy Tobin

A DAMAGING spiral of deflation is unlikely to hit the UK with prices actually set to rise "quite steeply" next year, the Bank of England's Deputy Governor said today.

Countering some economists' warnings that Britain could slump into a spiral of falling prices and wages, with a "vicious circle" where consumers delay spending and prices drop further, Ben Broadbent said that was "at best a partial description of the problem, at worst a bit misleading".

The Deputy Governor threw his weight behind the theory that Britain is experiencing "good deflation" spurred by better trade which will in return boost household incomes in the UK and support the country's economic recovery.

Speaking at Imperial College London's business school, Broadbent conceded that Bank of England policymakers remained "watchful" of the dangers of zero or negative price growth, after inflation fell to zero in February, its lowest level for more than 50 years. …

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