Bank of England calls for more power
A report by the Bank of England has highlighted the fact that the interest rate loan will not save the UK economy in the short to medium term and indeed will need to be complemented by other powers in the longer term. A review of the UK economy over the last decade has shown that the Bank of England would have had to push UK base rates to between 6% and 19% to control what was at the time an uncontrollable surge in property-based lending in the UK. So what extra powers will the Bank of England require?
At a time when the Conservative party is looking to give the Bank of England more power, if it is successful at the next general election, the Bank of England believes a series of surcharges are required to control excessive lending from UK banking institutions. The surcharges would be triggered in the event of periods of excessive lending and would effectively reduce the financial strength and lending capabilities of the UK banking sector as a whole. This would then allow the authorities to gain more control over the flow of finance in the UK and hopefully avoid the lending bubbles we have seen over the last 10 years.
Sounds simple, but is it really that easy?
MPC dissidents wanted rate hike
Two members of the Bank of England's monetary policy committee (MPC) voted in favour of an interest rate hike in April's decision, it has been revealed.Minutes of the April 5th meeting show that MPC members Tim Besley and Andrew Sentance preferred a quarter-point raise. All other members approved a hold at the present 5.25 per cent base rate.The decision to hold interest rates for the third consec...Read More
National Savings and Investments set to shake up savings market
The National Savings and Investment body has launched a one-year 3.95% fixed-rate savings bond which has caught the attention of consumers and savers in the UK. This is significantly higher than the vast majority of savings accounts and savings bonds offered in the wider market and will no doubt put significant pressure upon other companies in the UK to follow suit. However, there may well be othe...Read More
UK retail sales figures disappoint
Just as momentum was gathering behind hopes of a recovery in the UK economy in the short to medium term, it was revealed that retail sales in November fell by 0.3% month on month. This is a significant difference to the 0.4% increase forecast by many analysts and coming on top of October's 0.6% rise (which was revised upwards from 0.4%) it is a bitter blow to the sector. Year on year sales in t...Read More
UK government slaughtered as Corus closes steel plant
The chief executive of steel giant Corus tonight slaughtered the UK government after the announcement that the company was being forced to mothball the vast majority of its Teeside Cast Products plant with the loss of 1700 jobs. The company had been in talks with a potential white knight but this consortium collapsed at the last minute leaving Corus with no alternative but to close down the vast m...Read More
What have consumers learned about the recession?
It depends upon which newspaper or media channel you subscribe to as to whether you actually believe the UK economy has turned or is still in recession. However, over the last 18 months or so there have been many lessons learned by consumers but will we really make use of them in the future?
Despite the fact that the UK banks have come in for the most severe criticism from consumers...