UK won't follow Japan's example

LONDON - Bank of England policymaker Adam Posen said the UK and US economies are at a "low risk" of following Japan into a so-called lost decade of stagnation even as the threat of deflation remains.

"The UK and US economies are at low risk of turning Japanese in the sense of having recurrent recessions through macroeconomic policy mistakes," Posen said . Still, "we all share some risks and problems in common with Japan circa 1995" and deflation "cannot be ruled out".

Britain's economy probably grew faster than initially estimated in the first quarter as the recovery strengthened, data today may show. Japan's so-called lost decade, which Posen refers to as its "Great Recession", was a period during the 1990s in which the economy slipped in and out of recession and grew at an average rate of about 1 percent a year.