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Bill Jamieson: Plunging economy makes the case for halving rates

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Published Date: 02 December 2008
WE KNEW it was going to be bad. Just how bad is already looking a lot worse than we have bargained for. Latest pointers yesterday leave in no doubt that we are in the sharpest and most severe recession in living memory. There are now huge falls in manufacturing output, exports, order books, mortgage lending and credit availability.
The appalling data should leave the Bank of England's monetary policy committee in no doubt that a full one percentage point cut in interest rates to 2 per cent is the minimum it should announce this Thursday. Indeed, a drop to 1.5 per cent would be...



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  • Last Updated: 01 December 2008 11:48 PM
  • Source: The Scotsman
  • Location: Edinburgh
  • Related Topics: Bill Jamieson
 
1

Nacker,

02/12/2008 08:12:27
A simple solution exists but is obviously deemed politically incorrect.

-- Allow SIPP investors to purchase residential property.

SIPP investors have no confidence in stock markets, and are, in the main, sitting on piles of cash.

Allowing purchase of residentials will get the property market moving much more that an interest rate cut as mortgage lenders are not lending.

SIPP investors can make their own decision as to whether they wish to invest in the buy to let market, but at least take the shackles off such potential investors.

A cheap solution to the goverment as it won't cost them a penny. Why has this not been considered by those at Westmister??
2

Mcsnagpile,

02/12/2008 10:53:27
Reducing interest rates is a red herring. As an importing nation prices are rising as our pound exchange rate falls. Reducing interest rates can only acerbate this situation. The falling pound against the dollar only helps our oil exports which are substantially reduced nowadays (as our manufacturing has joined the Dodo).
The global economy has lag times and inertia to be considered that has not existed in the past. To re-inflate the local economy with the main international producers in the doldrums would as a minimum have a substantial delay and cause inflation to go through the roof. On the other hand the converse is more likely with international economies going into recession the inertia of such a large economic machine could cause a black hole. Only an international fiscal policy organisation with real clout has a chance of rectifying this situation.
3

A Friend of Fernando Poo,

02/12/2008 14:07:54
Don't worry: Edinburgh is special.
4

ccc,

02/12/2008 14:25:25
"WE KNEW it was going to be bad."

Bill Jamieson....

This is being filed in the 'Potential complaints to the PCC' section.

I don't think I have seen a paper so ludicrously attached to the SCOTLAND IS DIFFERENT mantra than the Scotsman. With Bill at its economic helm.

I love the revisionism that appears with these sort of things. Quite pathetic really. How about you tell us what you really thought 18 months ago Bill...

As for number 1...

Yes the whole cause of this mess was people buying property as an investment rather than as a home. So what is your solution ?

Yes, thats right - encourage more people to buy property as an investment !!

You couldn't make it up.
5

JRA,

02/12/2008 20:34:40
#4

Oh dear ccc. Don't you ever tire. Your repitition is becoming banal.

It's not that I don't agree with you on most points. It's just that you make them every day and they are slightly obvious.

What you are saying about property, is not intelligent and it's not insightful or interesting.

Property is falling in value. Get over it.

You remind me of Churchills quote about fanatics 'they will not change their minds and they will not change the subject'.

You are worse than easy money.
6

JRA,

02/12/2008 20:40:59
#3

Edinburgh is special.

It's not immune form the current economic storm, but it is a special city.

I have travelled, probably too much.

I have yet to see a city as fine as Edinburgh.

The cynics are out.
7

jimb4abobor2,

Edinburgh 27/12/2008 01:46:06
anything the goverment dont get money out off is not proper or allowed so sipps will not be on the white paper? all the goverment are doing is creating jobloss and destruction for all concerned and a controled society like in the days of robin hood.next year the economy will keep going down and there is nothing we can do but accept it or we could have a protest before everone in the uk ends up on the unemployment registar again. they talk about 3rd world countries well i think we should wake up and see the light as our's is going very quickly in the same direction. If they cant do the job then do what any real employer would do sack the lot of them and employ someone that can do the job right.Do it now before i'ts too late dont wait until the volcano to explode.

 

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