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Bank of England 'surprised' by strength of the recovery

The Bank of England's chief economist has told BBC Radio 4's Today programme that the Bank was taken by surprise by the speed of the economic recovery.

Spencer Dale, who is also a member of the Monetary Policy Committee (MPC) said: "What surprised us is two things. One is that the economy has grown more quickly than expected.

"Secondly, given that growth, the growth in employment has been exceptionally strong. Growth in employment in the three months to November was the strongest on record."

He explained that was the reason why the Bank has had to alter its forward guidance. Originally, that guidance had said the Bank would consider raising interest rates when unemployment dropped to 7%.

Easy Call

"The recovery was very weak. It had only just begun, and the levels of unemployment were really quite high.

"So at that point it was a relatively easy call - you could use 7% as a focal point for people and say that until it gets there, we're not even going to look at interest rates."

He said that the Bank did not have any "special secrets" about the state of the UK economy.

But he added: "What we do - and we do it an awful lot - as well as look at the aggregate data published by our statistical office, is we spend an awful lot of time going up and down the country speaking to businesses and learning first-hand what's going on.

"That's a massively useful piece of information. Don't always believe those statistics you read in the newspaper. Get out and speak to business first-hand to find out what's going on."

First broadcast on BBC Radio 4's Today programme on Thursday 13 February.

  • 13 Feb 2014
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