Thursday, 6 August 2009
Who do we believe??
We have all seen the latest headlines over the past couple of days.
Car sales soar by 2.4% thanks to scrappage scheme
House prices rise by 1.1% in July
The Bank of England today poured cold water on early signs that the UK's fragile economy is recovering as it extended its 'quantitative easing' scheme by £50 billion. The surprise move to extend the programme to £175billion shows that the Bank is cautious about an economic recovery despite a raft of recent positive figures.
So just to confirm the Zimbabwe type policy of just printing money has pumped £175 Billion into our economy.
And also to confirm the BoE can not just do that without it being rubber stamped by number 11.
At some point despite our outrageous levels of borrowing...........this 175 Billion has to be returned.
The Bank's ratesetters also decided to keep interest rates on hold at 0.5 per cent, as was widely predicted in the City.
In a statement explaining the decision, the Bank said the recession 'appears to have been deeper than previously thought'.
While the pace of decline has slowed and business surveys suggested the low point in activity was 'close at hand', money growth remains weak, the Bank said.
The news sent the pound down by almost a cent against the dollar.
Financial Secretary to the Treasury Stephen Timms said there was a 'growing sense of optimism' about the economy but conceded there remained a 'great deal of uncertainty'.
Timms......you have to be having a laugh with that statement. A group of experts have also warned that up to 400,000 households could default on their mortgages.
Another report says we could hit 3.5 million unemployed by 2011.
So who do we believe?
We are no where near the end of it despite what Robert Pestons Labour loving comments on the BBC state.
We are not even half way.