The U.K. economy can’t keep up the pace of growth seen in the second quarter and faces a “depressed and slow recovery,” former Bank of England policy maker Charles Goodhart said.
“The idea that we’re going to grow at 4 percent over the next year is fanciful and I think we’re going to go sharply backwards to a rate of growth that’s much lower,” Goodhart said on “The Pulse” with Andrea Catherwood on Bloomberg Television today. “It won’t be negative. It’s going to be a fairly depressed and slow recovery.”
U.K. gross domestic product rose at the fastest pace in four years in the quarter through June and data released yesterday showed manufacturing growth slowed less than economists forecast in July. Bank of England officials will probably still keep up economic stimulus in their Aug. 5 decision, economists predict.
“The expectation now is that the economy will begin to recover a bit more strongly and inflation will go down a bit sharper towards the end of next year,” Goodhart said. “By the end of 2012 I think there will be a clear attempt to normalize monetary policy again.”