There is, however, one issue I'd like to raise:
UK consumption will be affected by the future increases in interest rates which will be necessary to create more normal banking and monetary conditions,and to curb future inflation. A lot of present spending on goods and services by individuals has been made possible by substantial mortgage interest rate cuts. There is still a pressing need for many people and companies to repay debt, against the background of weak banks and the need to calm down after the credit binge of 2003-7.Absolutely, point taken. However, is it not true that mortgage rate cuts have not been filtering through to consumers in the first place? After all, at present, a number of Northern Rock customers are actually paying higher interest rates on their mortgages.
Given our ongoing problems in the banking sector, it wouldn't surprise me if millions of other bank customers were facing the same problems. Simply put, the banks can't afford to pass on interest rate cuts. In addition, the cost of lending for banks is actually getting more and more expensive as government debt soars.
That's what you get with Labour governments.
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