Ernst And Young Recommend Lower Interest Rates

MacMickster

This smacks of desperation, and reminds me of the Franklin D Roosevelt quote during the depression of the 1930s

"Do something. If it works, do more of it. If it doesn't, do something else."

Unfortunately, when you've already cut interest rates to 0.5%, there's not much more of it that you can do.

Mallotum_X

Graham_Devon wrote: »

I was talking more on the economy lines

I guess it did help trash the currency and help make our manufacturing base cheaper for exports, thus driving output and creating jobs.

Oh wait, scrub the last part, it helped trash the currency.

However,for the set of circumstances we had i'm not sure we had a lot of choice on this one, the plan was to keep people in their homes, whilst debt was repaid and banks could rebuild balance sheets and start lending again.

Only we dont appear to have got through it yet, and theres naff all left to cut. Still it got EY on the telly, so i guess the report worked well for them.

Right now I don't really see we have a lot of options available to us, global events are dictating what happens and when, Greece and the EU, China, the US all have more influence over us than knocking off another .25% will have.

I guess if we intend to inflate our way out of this then cutting rates some more, which will cut the exchange rate further and dumping a load more ££ into the economy would at least devalue the debt and maybe make it easier to deal with.

Losing_the_way

Though welcomed by some, only a few would benefit in the near future from dropping rates. However lifting the stamp duty threshold certainly would. It would also be a more direct way to help both lift volumes and values. The cost of doing this could easily be recouped from the increased volume, so it could be revenue neutral.

RenovationMan

Graham_Devon wrote: »

A move to lowering interest rates to 0.25% would of course prompt mass celebration by a few. Would also prompt threads to be dragged up, lots of glee, and an impact on our forests what with the amount of man size tissues used.

However, it would also indicate that our economy is absolutely up the creek without the inevitable paddle.

Surely having interest rates at 0.5% for over 2 years already indicates this?

reweird

If it kick starts the housing market and economy then it would be worth every penny.

EchoLocation

reweird wrote: »

If it kick starts the housing market and economy then it would be worth every penny.

But it won't, it'll just keep it suffering on life support until the inevitable happens. Only a long overdue and substantial correction in over-inflated house prices can get the market moving again. As for the wider economy, that's out of their control.

Pimperne1

EchoLocation wrote: »

But it won't, it'll just keep it suffering on life support until the inevitable happens. Only a long overdue and substantial correction in over-inflated house prices can get the market moving again. As for the wider economy, that's out of their control.

I think prices are already below the Nationwide Real House Price Trend over nearly 30 years though so the correction has already happened.

sheffield_lad

Pimperne1 wrote: »

I think prices are already below the Nationwide Real House Price Trend over nearly 30 years though so the correction has already happened.

Agreed, I do feel sorry for the renters though who have let websites like PPC brainwash them into thinking prices are going to half. That prediction started in 2003 we then have the biggest recession for 80yrs and houses remain stable.

Prices will remain stable to as there is a national shortage of houses, a city the size of Birmingham needs to be built every 2yrs to keep up with demand. How can prices crash 50% when this is the case and houses are not being built.

geneer

reweird wrote: »

If it kick starts the housing market and economy then it would be worth every penny.

Riiiiiiight. Ruining the world economy has been worth it. Gotcha.

wymondham

If rates went to 0.25% I'd get out all my savings and blow the lot on foreign made goods and then go unemployed, cap in hand......

The prudent have already been punished enough for the excesses of others......