Well it happened, then! Not only did the Bank of England lower the interest rate to 0.5% to discourage savers and to turn us into a nation of spenders, it also announced that it is to create £75billion of new money in an attempt to revive lending and an economy that is on the ropes.
This policy, apparently called quantitative easing, is about pouring money into the whole system rather than just into the banks. Mr Darling has given the Bank of England permission to extend this £75billion to up to £150billion.
Don't get too excited though, the Bank wont be printing a shed load of tenners, rather boringly it will be buying assets like bonds and gilts.
I may own a pair of red braces but I'm no financial guru but even I can see that if this is not policed properly by the Treasury, it could lead to higher inflation or even, heaven forbid, hyperinflation.
Everyone who stayed awake during history lessons at school knows what happened to the German economy in in the 1920's.
Just make sure history doesn't repeat itself, Mr Darling!
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Thursday, 5 March 2009
Are You Interested?
I’m usually known for my tongue in cheek slant on life, but my mind has today been tuned to a modern ponderable. I have just seen that the Bank of England is expected to announce another cut in the interest rate, down to 0.5%, in an attempt to revive the economy.
Just whose economy are they reviving? My bank hasn’t offered me a cheap interest loan since rates started dropping a few months ago, my credit card company hasn’t lowered my interest rate and savers are getting next to no return for their money.
The stock market still falls every day, companies are still going into administration, shops and pubs are still closing, redundancies are on the rise and pensions are being eroded, even a certain retired bank executive has been asked to hand back some of his pension! (I’ve managed to get a bit of satire in, then)
My first thought was that the banks were profiting from these cuts but they appear to be failing as well. If savers get almost no return for their money surely they are not putting it into the bank and if the man in the street is in jeopardy of losing his job, he’s not going to take on a bank loan so the banks can’t be taking in much money either.
So, Mr Darling, just who is profiting?
Just whose economy are they reviving? My bank hasn’t offered me a cheap interest loan since rates started dropping a few months ago, my credit card company hasn’t lowered my interest rate and savers are getting next to no return for their money.
The stock market still falls every day, companies are still going into administration, shops and pubs are still closing, redundancies are on the rise and pensions are being eroded, even a certain retired bank executive has been asked to hand back some of his pension! (I’ve managed to get a bit of satire in, then)
My first thought was that the banks were profiting from these cuts but they appear to be failing as well. If savers get almost no return for their money surely they are not putting it into the bank and if the man in the street is in jeopardy of losing his job, he’s not going to take on a bank loan so the banks can’t be taking in much money either.
So, Mr Darling, just who is profiting?
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