Update: BOE Bean: UK GDP "Almost Certainly" Contracted In 2Q

[Monitor]

Update: BOE Bean: UK GDP "Almost Certainly" Contracted In 2Q

LONDON (Dow Jones)--Bank of England Deputy Governor for Monetary
Policy Charlie Bean said Tuesday that U.K. economic activity "almost
certainly" shrank in the second quarter.

Bean was speaking to business people in Birmingham during a nationwide
tour to explain the bank's unconventional policy of quantitative
easing, through which it is buying GBP125 billion of public and
private sector securities with freshly created central bank money.

"The GDP figure that's due out at the end of this week will still show
almost certainly a negative figure," Bean said.

Economists polled by Dow Jones Newswires expect data Friday to show
that U.K. gross domestic product contracted by 0.3% on the quarter and
by 5.2% on the year in the April-June period, marking a big
improvement on the 2.4% quarterly and 4.9% annual drops in the January-
March period.

The deputy governor has said repeatedly during his tour that he
regards the U.K. economic picture as being broadly unchanged from the
time of the bank's last quarterly Inflation Report in May.

The central bank regarded the pre-crisis strength of sterling as
unsustainable and welcomed the decline in the currency over the past
couple of years as a means of rebalancing supply and demand in the
economy and supporting exports amid the global downturn.

Bean's comments suggest the BOE continues to see the pound's weakness
as largely positive.

"What we wouldn't be particularly pleased to see is a strong recovery
of sterling from where it is," Bean said. "We would certainly hope
that we don't see a bounce back to where it was a couple of years
ago."

(END) Dow Jones Newswires

July 21, 2009 11:56 ET (15:56 GMT)