Dawson & Fielding / British Economy Emerges From Recession.
Asia-based boutique brokerage, Dawson & Fielding Inc., has reportedly told clients that they should take little comfort from the fact that the UK, Europes second biggest economy, has emerged from recession.
Britain was expected to emerge from its longest recession with a 0.4% expansion in the economy but, instead, it limped through with a mere 0.1% growth leading analysts at Dawson & Fielding Inc. to suggest that the Bank of England might find it hard to justify ending its controversial quantitative easing program that has been the subject of much debate in both political and economic quarters.
The figures immediately sent sterling lower against the US dollar and a basket of other currencies and prompted speculation that Prime Minister Gordon Brown would find little to crow about as he faces re-election by June 2010.
Dawson & Fielding Inc. sources suggested that the figures highlighted just how precarious the economic situation in the UK is. He added that it was no surprise given the reluctance of the average debt-laden consumer to spend with the prospect of severe public sector cutbacks, higher taxation and a continuing shortage of easy credit.
Dawson & Fielding Inc. are thought to believe that unless stronger economic data surfaces between now and February 4th 2010 – the date for the next meeting of the Monetary Policy Committee there is a strong likelihood that the Bank of England may decide to extend its QE program which could have severe implications for sterling.