Shadow MPC warns of fragile recovery

That was the message emerging from the Shadow Monetary Policy Committee, when it met yesterday.

The committee, a partnership between the Yorkshire Post and the law firm Lupton Fawcett Lee & Priestley, is made up of business people, business advisers and union leaders.

David Bagley, who holds a series of non-executive directorships, pointed to 11 months of growth of the FTSE 100 index of leading companies as evidence of confidence.

“There’s obviously optimism out there in terms of the markets and they are generally six to nine months ahead of what is happening in the economy.

“But it is probably fairly fragile and it won’t take much to knock it off course.”

Nimble Thompson, chairman of mechanical and electrical services group NG Bailey, said: “Some parts of the economy are a lot better than we hear about but there are certainly big sectors like construction that are still awful.”

The committee voted eight to one in favour of maintaining the Bank of England’s base rate at 0.5 per cent.

Members of the committee also voted unanimously to hold the value of its quantitative easing programme at £375bn.

The Bank of England’s Monetary Policy Committee will hold its next meeting tomorrow.