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UK is ‘on the fast track to recovery’ – MPC member
The recovery of the British economy is now ‘sustainable and self-confirming, according to David Miles, an external member of the Monetary Policy Committee.
For Miles, the British economy is on the fast track to recovery.
At a speech in Newcastle, Miles opened with the statement: “For the first time in some years, the news on the outlook for economic activity in the UK over the past month or so has been overwhelmingly positive.”
He said he is “now more confident that we are on path to recovery than at any time since I joined the MPC in the first part of 2009.”
Miles’ reasoning for a U-turn with regard to his thoughts on the UK economy’s recovery were based partly on the Bank of England’s ‘forward guidance’ policy to hold interest rates until unemployment falls to 7%.
“The recent rise in activity and confidence in the UK could be – I believe – sustainable and self-confirming,” he said.
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“Until quite recently … I favoured a more expansionary policy to help shift the economy onto a better trajectory. There are some signs that we may now be on such a trajectory – and that is the reason I think keeping Bank rate and [QE] at their current levels is the right policy for now.”
Miles is one of the most dovish members of the Monetary Policy Committee, and has been a strong backer of quantitative easing as a way to support the recovery.
However, last month, he stopped voting for another £25bn of quantitative easing, a stance he had held since November 2012.