The substantial cuts in UK interest rates and more quantitative easing are likely to have a significant impact on demand in the British economy, the Bank of England monetary policy member-designate David Miles said Thursday.

Speaking to the Western Mail newspaper, Miles said, Economic history teaches us that a combination of tax cuts, running large fiscal deficits, substantial cuts in interests rates and more quantitative easing is likely, with a certain time lag, to have a substantial impact on demand in the economy and it may well be that the worst of the recession may well be behind us.

Miles, managing director at Morgan Stanley International would be joining the BoE's policy making body in summer, replacing arch-dove David Blanchflower, whose three-year term ends in June.

Again it's early days but the early signs are that it's having an impact and the hope is this will have an impact on the cost of corporate debt and its availability, as the money flows through the system, making it easier for banks to lend, the newspaper quoted Miles as saying.

The economist said he is guardedly optimistic about the economy as the world stands united in addressing the global slowdown, while in the UK, the central bank has cut its key interest rate to the lowest level ever seen.

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