Finance & Business World

Former Bank of England policy maker David Blanchflower said the central bank risks cutting the economic recovery short and should expand the program to buy bonds with newly created money.

Any growth in the economy will be “pretty anemic, pretty slow for a year or two,” said Blanchflower in an interview with Bloomberg Television yesterday from Dartmouth College in Hanover, New Hampshire, where he is professor of economics. “My worry is that the tightening comes too soon and people kill off any recovery that’s coming.”

The pound rose and bonds fell after policy maker Andrew Sentance said the Bank of England will consider pausing the 125- billion pound ($207 billion) bond-purchase program next month. The British economy will show signs of recovery in the second half of 2009 after contracting for a year, Sentance said payday loan.

“It’s very early days to say that you know the endgame is even in sight,” Blanchflower said. The bank should consider spending as much as 300 billion pounds in newly printed money, twice as much as the current total authorized by the government, he said.

U.K. gross domestic product fell 0.8 percent in the second quarter from the first three months of the year, the Office for National Statistics said today in London. That’s more than twice the 0.3 percent median forecast in a Bloomberg News survey of 32 economists.

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