Wednesday, May 16, 2012
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"The single biggest threat to the recovery stems from the challenges within the euro area, in particular the need to reduce the indebtedness and improve the competitiveness of some member countries. ...As was the case in past Reports, the MPC sees no meaningful way to quantify the size and likelihood of the most extreme possibilities associated with developments in the euro area, and they are therefore excluded from the fan charts. But the threat of these more extreme outcomes is likely to affect economic activity over the forecast period, for example through its effect on asset prices, including the exchange rate, bank funding costs, and confidence; such effects are captured in the MPCâ€™s projections."