IMF says Britain must relax austerity if eurozone crisis escalates

Itismehonest

StevieJ wrote: »

I can anticipate the replies, along the lines of 'What austerity' Has Ed Balls moved jobs or is the French view shining through?

http://www.telegraph.co.uk/finance/economics/9281686/IMF-says-Britain-must-relax-austerity-if-eurozone-crisis-escalates.html

She's also saying we should cut the Public Service wage bill even further & use the money on infrastructure projects.

RUN_RABBIT_RUN

IMF tells UK to consider rate cut to boost growth

http://www.bbc.co.uk/news/business-18158226

another blow to the 'raise interest rates' brigade. now even the imf is saying we should be cutting them

presumably the imf has some sort of vi :rotfl:

grizzly1911

RUN_RABBIT_RUN wrote: »

IMF tells UK to consider rate cut to boost growth

http://www.bbc.co.uk/news/business-18158226

another blow to the 'raise interest rates' brigade. now even the imf is saying we should be cutting them

presumably the imf has some sort of vi :rotfl:

IMO a rate cut form 0.5% is pointless, it is zero to all intents and purposes and apart from big business irrelevant.

Banks will still price according to the market and risk reward. Fixed savings rates at 4% for 2years + aren't exactly low only instant access passbook accounts are pants.

If it ain't happening at current levels shaving an extra 0.25%, or such, off isn't going to be the answer.

michaels

It would put more money in to the pockets of anyone with a tracker mortgage tho And may be have some psychological impact in reinforcing the low rates are here to stay mantra.

THey also recomend more QE, again if Eur problems worsen the economy more than expected.

grizzly1911 wrote: »

IMO a rate cut form 0.5% is pointless, it is zero to all intents and purposes and apart from big business irrelevant.

Banks will still price according to the market and risk reward. Fixed savings rates at 4% for 2years + aren't exactly low only instant access passbook accounts are pants.

If it ain't happening at current levels shaving an extra 0.25%, or such, off isn't going to be the answer.

DaddyBear

HAMISH_MCTAVISH wrote: »

Inevitable.

You can't cut your way out of a recession.

And you can't borrow your way out of debt. I'm beginning to think that the only chance the UK has is to send Merv to Las Vegas and put all our money on Black.

homelessskilledworker

The only thing the UK economy needs right now is the full recession that it so badly needs with no tinkering. And THEN and only then will we start getting the proper organic growth that our economy needs.
People sometimes forget the postives of recession, for a start they clear out dead wood. I go along the line that many economists go along with in that the economy is living breathing wild animal, you can only control it to a degree.

If we look at the housing market for example(which is what this board is supposed to be about), we have millions of potential sellers who are still living in pre 2007 days, where their houses were ramped up by what is today considered reckless debt. Those days are long gone and today we are now in a credit crunch, the markets are telling property prices to collapse, it is only a matter of time now.

Greece will probably be the trigger in my opinion, for too long now many of the Euro countrys have been trying to fix their problems without pain... Impossible.
The UK IMO is one of a few countries that has gone someway to doing the right thing, sadly it is not nearly enough.

I knew this day was coming, as did a handful of others, we started our own personal austerity measures a few years ago:)

Graham_Devon

Could we have negative rates?

A rate cut would be down to 0%, no point in doing 0.25%. So could we go further and go negative?

N1AK

HAMISH_MCTAVISH wrote: »

Inevitable.

You can't cut your way out of a recession.

What people who parrot this incessantly seem to ignore is that simply avoiding recession isn't the only consideration.

If you borrow £50,000 and re-mortgage you can spend widely for a couple of years (avoiding recession) but you've just dug yourself a bigger hole to climb out of in the end.

The_J

N1AK wrote: »

What people who parrot this incessantly seem to ignore is that simply avoiding recession isn't the only consideration.

If you borrow £50,000 and re-mortgage you can spend widely for a couple of years (avoiding recession) but you've just dug yourself a bigger hole to climb out of in the end.

What if you invested that money in a business idea that returned a regular monthly income of £1,000?

grizzly1911

The_J wrote: »

What if you invested that money in a business idea that returned a regular monthly income of £1,000?

Agreed but most small businesses fail don't they?