Business | Economy
Brown prepared to borrow amid fresh signs of deepening recession
British Prime Minister Gordon Brown is ready to borrow more to give the economy a much-needed boost, he said on Tuesday, following weak housing and retail figures that gave fresh indication of a deepening recession.
- Agencies
- Published: 00:01 November 12, 2008
London: British Prime Minister Gordon Brown is ready to borrow more to give the economy a much-needed boost, he said on Tuesday, following weak housing and retail figures that gave fresh indication of a deepening recession.
House sales in Britain reached their lowest level in at least 30 years and retail sales fell by the biggest amount in three years in October, Tuesday's published data showed.
The gloomy figures helped push trade-weighted sterling to a new 12-year low as investors shunned riskier assets amid expectations the Bank of England may lower interest rates again after its shock 1.5 percent cut last week.
British Prime Minister Gordon Brown said he was ready to provide fiscal stimulus to help the economy recover from the financial crisis and he urged other countries to do the same.
"We need to have cooperative action across the world to achieve that and that means that each country must make their contribution," Brown said.
"A fiscal stimulus means that you are prepared to add to borrowing in conditions where you have low national debt to enable the economy to move forward."
Brown's government is reportedly set to announce tax cuts in its pre-budget report expected later this month.
His finance minister Alistair Darling will unveil the government's spending plans in a pre-budget report due within weeks as union and business leaders warn of widespread job losses unless urgent action is taken to boost the economy.
Downturn
Adam Chester, chief treasury economist at HBOS said the housing and retail sales figures "confirm the downturn that's taking place in the UK economy".
"The housing market is linked to the consumer sector, so the weakening in house prices continues to come through," he said.
Fears about inflation have now dissipated and economists await details of how much the Bank of England revises its forecasts in its inflation report today.
The Royal Institution of Chartered Surveyors said the average number of home sales per surveyor over the three months to October fell to 10.9, the lowest since the series began in 1978.
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