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Rare Dose Of Reality From The UK: BOE's Adam Posen Says Chance UK Could Slip Into Recession

Tyler Durden's picture


In a rare dose of realism, Reuters reports that the BOE's Monetary Policy Committee member Adam Posen said there is a distinct chance the UK economy could slip back into a recession. Not surprisingly, the BOE member said eurozone public sector cuts would add as a drag on the UK economy. He also added that he hopes the recovery would continue but it can not be guaranteed. As the BOE has demonstrated no problems in the past with activating money printing QE episodes, is this merely a preamble to yet another round of English quantitative easing? As was pointed out on Zero Hedge over the weekend, recent changes in excess reserves in the US have provided the implicit benefit of nearly $200 billion in new Fed money entering the pursuit of risky assets, and everyone knows that the ECB is now on crash course with Germany over its own most recent monetization regime. It should thus come as no surprise that the UK feels alone and will likely do all it can to pursue the same currency devaluation techniques that seem to be prevalent across the globe, and not be left too far behind.


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Mon, 07/12/2010 - 11:22 | Link to Comment tompicking
tompicking's picture

UK != England

Mon, 07/12/2010 - 12:02 | Link to Comment Screwloose
Screwloose's picture

Plus Scotland; Wales and Northern Ireland. 

Mon, 07/12/2010 - 14:47 | Link to Comment Sabremesh
Sabremesh's picture

However, the Bank of England is the central bank for the whole of the UK (ie including the ahem, minor satellite nations of Scotland, Wales and Northern Ireland ;). An accident of history is what we call it, but it makes the geopolitical intricacies of the British Isles even more confusing.

Mon, 07/12/2010 - 11:32 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

How could all of these PhDs miss the lesson on Race to the Bottom in 100, 200, 300, and 400 level econ course work?

Mon, 07/12/2010 - 11:37 | Link to Comment Ripped Chunk
Ripped Chunk's picture

If they are going to "slip" into a recession, what are they slipping away from?

Mon, 07/12/2010 - 12:09 | Link to Comment Yardfarmer
Yardfarmer's picture

Reality indeed! Mr. Posen and his colleagues as well as their counterparts across the pond pretend they have no clue. Yet the handwriting on the wall needs little translation. The attendant and ominous specters of financial collapse refuse to be dispelled by the money masters' disingenuous and self serving fictions. When the prime motivation of the BOE along with other mega-banks is problematic capital formation and refinancing in the face of looming increased regulatory regimens attended by a collapsing housing market, escalation of commercial defaults, reversals in investor risk, direct exposure to counterparty risks associated with OTC derivatives /sovereign debt, one might well suspect that "a chance the UK might slip back into recession" is a bit understated. 

Thu, 08/19/2010 - 10:55 | Link to Comment herry
herry's picture

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