UK 'will need to cut taxes or boost spending at next downturn'

Effectiveness of monetary policy will be limited in next recession, say ex-BoE officials

The government will need to cut taxes or boost spending when the next economic downturn arrives, according to two former Bank of England officials who said the central bank was low on firepower.

The former deputy governors Rachel Lomax and Sir Charles Bean warned ministers they will be unable to rely on monetary policy to combat the next recession now that interest rates are at historically low levels.

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