Finding the real story of recession
Updated on 22 May 2009
Bank of England monetary policy committee member Andrew Sentance talks exclusively to Faisal Islam during a tour to see the impact of recession on the frontline in Liverpool.
It is too soon to be talking about the green shoots of economic recovery, according to this member of the Bank of England's committee that sets interest rates.
Now that rates can go down no further, his votes have helped the creation of £125bn of new cash to be poured into the economy to keep spending going.
"We have to get to a point where the economy stops contracting before it begins to recover," he says. "Therefore, I think the first thing to look for is a slowdown in the rate of decline, an indication that things are bottoming out."
The stops on this investigative tour include a manufacturer of copper tubing for the plumbing industry, a discount retailer which sells major grocery brands cheaply, and a breakfast with Merseyside's young professionals.
"The other thing I am also looking out for particularly is the extent which companies are seeing what is going on at the moment as temporary and they still have confidence in the longer term prospects for their businesses," Sentance says.
He says the worst of the collapse in output may be behind us, but there are threats to the strength of any recovery.
"I would be hopeful that we will see a recovery starting later this year or in 2010," he says. "The evidence I've seen on this visit is, I think, still consistent with that."
