Economic outlook unchanged, says Bank of England financial watchdog

A new Bank of England financial watchdog today said the outlook had not changed sufficiently in the last three months for it to alter its policy recommendations.

The Financial Policy Committee (FPC) said in June that banks could temporarily run-down some of the short-term cash set aside for future market shocks in a bid to stimulate lending and growth in the economy.

The FPC said financial stability had not altered since June and maintained all recommendations, including that banks should restrain payouts to shareholders and bonuses so they can build up cash reserves.

The FPC, which will publish minutes of its September meeting on Thursday, was formed as part of a wider shake-up of the UK regulatory system and is currently operating in an interim capacity.

PA