[Re: Negative interest rates are the last thing the economy needs, yesterday]
Driving down the nominal interest rate below zero (and the suggestion that Britain will see further quantitative easing) shows just how strongly the Bank of England supports the UK’s debt economy. The whole system encourages consumers to borrow money and penalises anyone seeking to save. In any case, inflation has made even generous savings deals unattractive to consumers. But our economic difficulties are systemic rather than cyclical. Monetary loosening is no more than a temporary cure, and it is medicine that is becoming less and less effective. We need proper political action to allow the UK economy to grow.
[Re: Why the coalition may hope for Ukip victory in Eastleigh, Tuesday]
However badly Nick Clegg and the Lib Dems have done, the party will still hold the balance of power in the next Parliament. The Conservatives will regain some support in the run-up to the next election, but does anyone truly think David Cameron can win outright? Labour is failing to capitalise on the coalition’s failures and Ed Miliband has not proven himself as a future Prime Minister. Finally, the Lib Dems (despite, as Andrew Lilico says, losing half their supporters), will cling onto seats. All in all, a depressing picture. Who can blame Lilico for wishing for the excitement of a Ukip victory in Eastleigh?
BEST OF TWITTER
I can’t understand the anger over British Gas making a profit. It is a company, and that’s what companies are supposed to do.
Double dip may have disappeared, but there still isn’t any real growth. Low rates help to bump along the bottom, but we need more.
Make up your mind, economists. First we hear how the economy hasn’t grown, now we’re told that it grew more than expected.
The EU has finally decided to ban the dumping of edible fish back into the sea. It is always nice to see common sense prevailing.
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