Blanchflower Says U.K. Rates Should Be Near Zero, Times Reports

By Laura Cochrane

Jan. 25 (Bloomberg) -- U.K. interest rates should “obviously” be cut to the near-zero level, Bank of England policy maker David Blanchflower said, according to the Sunday Times.

Rates should be at the 0 to 0.25 percent level to aid economic recovery, after the Bank of England’s Monetary Policy Committee kept borrowing rates too low during the good times, the paper cited Blanchflower as saying in an interview.

“It certainly appears that the housing market was a bubble,” Blanchfower said, according to the report.

The U.K. economy will continue to shrink in the third quarter and unemployment will rise to 3 million in the next year from 1.92 million, Blanchflower said in the interview.

To contact the reporter on this story: Laura Cochrane in London at lcochrane3@bloomberg.net