Martin Weale, a member of the Bank of England’s Monetary Policy Committee, has said that he is hopeful of a revival within the economy, although he has warned that despite the underlying sense of confidence, the Eurozone crisis could still influence the recovery.
During a visit to Birmingham this week, Mr Weale said: I would say that the general mood is that there is an underlying sense of confidence. The economy is stagnating but I have not heard people say ‘this is a disaster.’
“For quite a long period now, we have had slight upward movement, and slight downward movement. Rather than describe it as a double-dip recession, I would describe it as a sustained period of stagnation.
“Not only are we not making any progress, but we are not growing at all. My hope is that there will be a gradual revival.
“I think that the squeeze on household spending through rising fuel and petrol prices is coming to an end. The big uncertainty is how the situation in the Eurozone develops.”
Mr Weale, who previously worked as the Director of the National Institute of Economic and Social Research, added: “I think in the longer term we need to get into a situation where people feel more comfortable about the level of debt they have.
“I think that people have discovered that debt is not an automatic way to higher profits.
“But the elephant in the room is the Eurozone and that could have very unpleasant consequences and I think that everybody recognises that.”
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