| Topic: | Re:Time to raise interest rates? | |
| Posted by: | Thomas Barry | |
| Date/Time: | 24/03/09 11:28:00 |
| Um, the point of all the interest rate cuts and QE etc. is to prevent deflation. That looks like it's working to me, to an extent. We are in the unfortunate position of being heavily dependent on financial services and property, with a budget deficit and looming unemployment issue. We are in the fortunate position of being able to borrow heavily (owing to our better-than-most borrowing figures going into this) and, not being in the Eurozone, drop the pound from its inflated value, which increases demand for what home produced stuff we make while keeping imported goods prices high and thus reducing deflation. For instance, I'm in the market for a netbook computer - if I was expecting deflation I'd wait until it dropped in price, as it is I should have bought one in January as the prices have gone up about £30. Teach me, won't it? |