Sep 18 2007
The bank at last signals it wants lower interest rates
Today’s announcement from the bank that it will be active in the market is designed to lower overnight and three months interest rates and reduce the cash shortage. Why did they delay so long before doing this? Other central banks have been more active. The gap between three month rates and minimum lending rates has been far too high for comfort.
If the Bank of England had eased rates at an earlier stage we might have avoided the drama of the last few days.
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John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
The interesting thing about this is that Labour basically had to be told by others what the problem was, and how to address it. Further proof that Labour’s understanding of how the market operates is naive and that they cannot be trusted with the economy.
I can’t help feeling that the Bank of England aren’t really pulling the strings here. The Bank surely would know what to do in a situation like this, but I smell political interference from Brown and Darling - despite the Bank supposedly being independent.
Reply: see my Independence blog.