better than the 15% that happened when the tories were running the economy
2007-12-06 04:38:48
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answer #1
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answered by Tequila.... 7
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Brown encouraged a ten year long orgy of irresponsible borrowing/lending which, in addition to driving people into debt, fuelled house prices to grossly over inflated values.
He achieved this by pursuing a low interest rate policy ( forget the so called independence of the BOE, because Brown established a totally unrepresentative inflation measure, thus ensuring low interest rates, and it is he who appoints the Governor) and by removing some of the essential powers that the BOE needed to control the irresponsible lending by the Banks. It isn't widely known that the BOE Governor asked Brown two years ago to return some these powers so that he could take action against some of the Banks (one thinks of Northern Rock). Brown refused. The BOE had no direct authority to move rates to control house price inflation.
Therefore, Brown got his boom, and the economy and the Government looked good. People were happy, but it was all on borrowed money and inflated asset values. The problem we now face was always going to be with us, it was simply when.
Low interest rates affects those who rely on the interest from savings, not to mention first time house buyers who can't buy their first house because of ludicrous values. It also discourages saving. My point is, that low interest rates are always sold to us as a good thing.
Now, even responsible financial commentators have joined the clarion call to lower interest rates again. The Governor of the BOE is under tremendous pressure from politicians and others with a vested interest to comply.
In my view, this is badly misguided, and cowardly, for, it is essential that irresponsible borrowers, lenders, and the Government, suffer for their sins. This is so that we don't have a repeat performance, and/or make the existing situation even worse. You can't run an economy on the back of house price valuations.
2007-12-06 04:38:42
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answer #2
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answered by Veritas 7
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The bank of England is independant. The government has no influence on Interest Rates. They do however set inflation rate targets for the Bank. Inflation is controlled by interest rate movements.
Interest rate have recently gone up because growth was too fast and inflation was increasing. The economy has slowed now but is still growing with lesss inflationary pressures.
As much as i hate Labour and Gordon Brown your question is illinformed and shows no understanding of economics.
2007-12-06 03:37:04
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answer #3
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answered by Anonymous
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Better than a slap in the face with a dead fish.
2007-12-06 03:07:31
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answer #4
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answered by taxed till i die,and then some. 7
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"...but don't hold your breath !" -- said TalkSport radio this morning LOL !
2007-12-06 03:37:28
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answer #5
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answered by RED-CHROME 6
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you bet ye.
2007-12-06 13:11:20
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answer #6
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answered by Anonymous
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