@GEZT, GEZT, GEZT
Sorry mate…memo to myself…I must go to Specsavers in future.
44 Tonne Ton:
del949:
but we aren’t in a mess like Greece (or Spain etc ).Not from the Mail…
Traders were disappointed after the Bank of England chose not to pump more money into the economy on Thursday, despite the ongoing turmoil in the eurozone.
The bank kept its key interest rate unchanged at a record low, 0.5%, while the total quantitative easing conducted to date will remain at £325bn.
That’s a lot of debt on top of what we already had.
Inflation is still high at 3%, despite a big drop in April, and last month the monetary policy committee (MPC) said it would take nine months longer than previously thought for it to return to its 2% target.
Members of the committee have since been playing down the prospect of further stimulus, unless an escalation of the euro crisis worsens Britain’s economic prospects. Only one of the nine members of the MPC backed more QE in May.
A survey of purchasing mangers in the service sector released earlier on Thursday also showed some resilience in the economy, in contrast to a sharp fall in its manufacturing equivalent last week.
But economists expect more QE soon. Minutes from the last MPC meeting showed that the vote against a new round of stimulus was “finely balance” for several members of the committee.
More debt when/if it happens.
Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said: “The decision to hold steady on policy was largely expected but, with a range of indicators for the UK economy on the slide, this is likely to be a wait-and-see position. The risks to growth seem to be building and another expansion in asset purchases may be called on to get the economy out of reverse gear.”
That doesn’t sound promising
We’re printing money to bail us out of trouble. The real danger with that is the potential collapse in confidence that might occur because of this and along with it a serious risk of very high inflation. Confidence is everything in finance. We have very high levels of debt, not dissimilar to other countries who are in serious trouble now. We are still fortunately able to borrow money much more cheaply that Greece and Spain, mainly because we’re not in the Euro which means we’re still a going concern, for now anyway. We’re not in the worst position but we’re not in a great position. Finely balanced is how I’d describe it. Or, a bit of a mess.
The Spanish situation.
Debt crisis: live
Spain moves closer to the credit junk pile as Fitch slashes the country’s rating by three notches and warns the likely cost of restructuring and recapitalising the Spanish banking sector could reach €100bn.
The 3% inflation figure can be taken with a pinch of salt and the base/savers level of interest rates v the rates charged in the market for loans is just another form of bank rescue package that’s only there for as long as the savers have any of their reducing funds left.In real terms the pound isn’t worth the paper it’s written on and what it is worth is all based on the latest overvalued figure which the bank of england has thought up for the month until everyone eventually realises that the banks are running on bs not real wealth to back the currency.