The Bank of England has room to manoeuvre on interest rates but policy appropriate for the U.S. economy may not be suitable here, British finance minister Alistair Darling told parliament said on Thursday.
His comments suggest the government would welcome another interest rate cut from Britain's central bank but is not clamouring after the sharp rate cuts made by the U.S. Federal
Asked whether the British and European Union response to the credit crunch should be similar to U.S. approach of lower interest rates and fiscal stimulus, Darling said:
"The situation is the United States economy is rather different to the situation in our economy and also in relation to other major economies in the European Union.
"In relation to what we're doing, I've said on a number of occasions because of the fact that we now have low unemployment, we've got historically low inflation, low levels of interest rates and mortgage rates, the Monetary Policy Committee has room for manoeuvre."
The U.S. Federal Reserve cut interest rates by 75 basis points earlier this week, its biggest cut in a quarter of a century.
The Bank of England cut rates by 25 basis points in December and is expected to make a similar cut next month. British finance ministers tend to be wary of commenting on
monetary policy for fear of jeopardising the independence of the central bank.
BoE Governor Mervyn King's term as central bank chief expires this year and the government is expected make an announcement on his reappointment in the next few weeks.