BoE’s Blanchflower: “Nonsense” to say crisis unpredictable

 It was "crass nonsense" to believe the economic crisis was impossible to predict, Bank of England policymaker David Blanchflower said in an interview on Monday.

The arch dove considered resigning over what he viewed as an overly optimistic report on the economy released by the British central bank last August, according to extracts of a Channel 4 television interview published in two newspapers.

Blanchflower, who steps down from the bank's rate-setting Monetary Policy Committee at the end of next month, said the bank's inflation report was based on "wishful thinking".

"I decided that a severe recession was coming and that the report was just completely wrong," Blanchflower told the "Dispatches" programme, according to the Guardian and Daily Mail newspapers. "I kept thinking: 'Am I wrong? If I am so wrong then I ought to just quit'."

Asked whether it would have made a material difference if the central bank had cut rates sooner, he told the programme: "Yes".

Blanchflower's comments come before British finance minister Alistair Darling makes what is widely expected to be one of the bleakest annual budget announcements in years on Wednesday.

Britain's economy entered recession at the end of 2008, shrinking at the fastest pace since 1980 in the three months to December. Business groups and unions last year accused the bank of being too slow to respond to the crisis with rate cuts.

Although the bank went on to cut rates to an historic low of 0.5 percent, Blanchflower has previously described its policy of failing to be sufficiently forward looking.