5 March 2009
The Bank of England cut base rate to a record low of 0:5% this the sixth consecutive month the BoE has cut rates but the banks Governor Mervyn King suggested they will stop short of zero rates.
The BoE have announced the predicted quantitative easing with an astonishing £75 billion injection into the system over the next few months, effectively ‘printing money’ which would usually lead to high rates of inflation. The £75 billion is about 5% of GDP.
These figures become frightening given the bank bail outs continue at pace with some insiders predicting that some banks may need further cash injections from the taxpayer.
The figures are in fact ludicrous in terms of falling tax revenues & the stop gap vat cuts falling pump prices, the list is endless & still they continue to borrow money in ways that make the sub prime markets seem almost sensible by comparison.
The so called quantitative easing has been tried by others, namely Japan & was an abject failure with the sun never rising during the period of world growth in the 90’s & early 2000.
The real problem is they are taking any decision but the hard ones as the 2010 election year looms, nothing they have done has made any positive difference to the situation as company after company announce short time working, factory closures, redundancies & it looks as if the worst is still to come in private sector employment, one wonders when the government will begin to cut the public sector & rid us of the outrageous pension scheme which has been unaffordable for years & is getting to the point where the black hole that seems to finance the scheme finally swallows the UK economy, what would the public sector prefer a job or a pension that will disappear when it becomes un-fundable, ie no job, no pension we really do need a reality check in the UK.
Gordon Brown & his dear Prudence was just a fantasy as he borrowed so much money almost from day one of his tenure as chancellor that the UK economy could never stand the pressures now being exerted on it & his answer to the situation is not only to borrow more money at astonishing levels but to print it as well much of which will be to fund the massive levels of public sector workers/dept’s many of whom were particularly overstaffed before the recession but are now in reality not even needed, & the socialisation of the UK goes on unabated, suggesting economics were never really the basis for the Brown plot, but even this plot seems to have been lost.
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