The Bank of England has cut the base interest rate to an incredible all time low of 1% today, in a bid to get consumers and businesses spending again and drive the economy out of recession.
While the news was pretty much expected, many economists are looking for further reductions in the rate over the next few months. The rate has now been cut by 4% since November last year and looks likely to follow the lead of countries like the USA and Japan who already have sub one percent rates.
While earlier cuts seem to have had little impact on spending, they have had a serious effect on both the value of sterling and the value of bank savings accounts. Savers may as well keep their money under the mattress with the return that is currently being offered, while the weak pound is pushing up the cost of imported products.
The UK government in the meantime continue to pump taxpayers money into failing banks who fail to comply with the terms imposed on them by dear old Gordon Brown and continue to laugh behind his back and reward themselves with big bonuses for bringing the country to it’s knees.
Is there a plan ‘B’? I doubt it very much as the incompetent ex chancellor Brown really does believe that he is on a mission to save the world.
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