What will be the spark to reignite the UK economy?
As the UK economy continues to toil and the UK business sector is starved of any significant investment capital, many are looking around to see exactly what could be the spark to reignite the UK economy. Will it be interest rates? Will it be a change of strategy by the banks? Or will it be as simple as improved confidence?
While confidence is the key to any significant increase in recovery in the UK economy there will need to be certain conditions in place before any confidence boost can push the economy ahead. Liquidity has never been more vital in the business and personal world of finance and although at the moment the UK banks seem very risk averse and unwilling or unable to increase their exposure. Pulling together the elements of confidence and increased liquidity in the financial markets is not easy but this could be the double spark which reignites UK economy.
Interest rates falling to 0%, inflation falling further or investors returning to the property market could well be one of the prompts needed to instil more confidence and more liquidity to the UK. However, it has to be said that at this moment in time a significant boost to the UK economy still appears to be some way off.
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