Speaking in advance of the Monetary Policy Committee’s October meeting, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:
“Since the Committee last met we have witnessed crisis in world financial markets and accumulating bad news on the domestic front. There should now be little doubt that deep and prolonged recession poses a far greater threat to the UK economy than inflation. However recent statements by some MPC members demonstrate a worrying complacency about the state of the economy.
“The MPC must act now by agreeing a cut of at least half of one per cent. Cheaper borrowing will not solve all Britain’s economic ills and will probably come too late to prevent recession. But it will help cushion the fall.
“Granting independence to the Bank of England is generally regarded as a success but, until now, the MPC has benefited from an economic climate generally favourable to meeting its inflation target.
“If it should fail its first real test, the Government must urgently consider providing the MPC with a dual mandate on inflation and employment along the lines of the US Federal Reserve”.
ENDS
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