Brown's spend, spend, spend during his Chancellor's days has brought us into the current economy we are facing today. His appeal at a Downing Street meeting for the lenders to pass on cuts appeared to fall on deaf ears with HBOS, which owns the Halifax, increasing its rate on some mortgages from 6.09 to 6.59 per cent. Borrowers taking out this type of deal will now pay 46 more a month. On a two-year tracker, the rate will increase from 1.49 points above base rate to 1.99 points, giving a current rate of 6.99 per cent.

Other lenders are expected to follow Halifaxs lead.

If the Government wants the banks to lower mortgage rates to home owners - why not just offer them through Northern Rock? Everyone would rush to the Rock to get the loans forcing banks to match the rates or lose the business? Or maybe the government would then run into bigger credit crunch?

hil, I suppose it is not due to weakness. I think when the full effects of Bank "debts" in Europe and the rest of the world are understood, the will again increase in value. I think the actions of one man do not have the effect that is supposed.
But this is capitalism at its best.

Maddoctor, the present bunch of "Tory Toy Boys" couldn't find a tree, and if they did find the tree, couldn't tie the noose.

Actually, I think you'd be amazed at how the rhetoric of key individuals can influence currency markets, Fred. There's so much more that hinges on them than just the price of fags'n'booze in Calais.

The problem here is that Brown and the MPC are so far behind the curve that it's unreal. The market is far smarter than anyone in Downing Street and had the measure of things nearly a year ago. For Brown and co to be spouting off at this stage in the game is dangerous as they will probably cause sterling to overshoot and that's what Osborne was warning against last week when he broke the unwritten rule.

There's only one member of the MPC who's got any idea whatsoever imo, and that's Prof Blanchflower who happens to reside 3,000 miles away in New Hampshire.

Hil, No, I can see the effect of Share betting and Hedge Funds and "informed" financial opinion in the media.
Does MPC refer to "unit of length used in astronomy"?

There were people in the market calling the problems in the market 18~+months ago, but the "MARKET" ignore their calls and hence the present "chaos".

The market relies and "emotion" as much as "reality". The movement of money likewise and probably always will do.

My main contention is that many of the so called "leaders" of industry did not and are not taking their responsibilities leading up to the present chaos and "demanding" rather than asking for bailouts for their own imprudences.

These worthy individuals have the responsibilities for their own misconceptions.

Lower GBP is good for British business and discourages the consumption of imports.

High GBP has been killing our manufacturing industry over the past year or so ( those not already dead).

If you re-read my post, Fred, you'll see that I was referring to currency markets and not stck markets which nearly always lag.

Currency markets hang on the exact wording of sentences from the likes of Bernanke, Paulson, King and Weber. One word slightly out of place in a Fed statement can shift the buck 2 cents in 15 minutes as the market tries to pre-empt where they will go 1 month out. The words of Brown and the MPC last week were ill-timed quite frankly.

You're right, but we're always going to import more than we export, Dilbert, and this is a very fine balancing act which needs to be performed. Strangling sterling further will not help mineral and energy price falls to flow through as they are traded exclusively in USD.

I just happen to think that a softly, softly approach would be better at this stage. Talk of further interest rate cuts will just kill sterling further, but the cuts themselves will be of no benefit until the banks themselves are ready, willing and able to start lending again.

Can you honestly say that you think zero rate finance and high borrowing is going to do us any good? Look at Japan a decade ago.

I would like to say more fool them.

The Stock market, Currency market and economic of various countries are all interwoven and driven by intelligent guesswork. They reflect each other at different time scales. I would prefer to look at what I have in my hand than that on the bush.

At least I will have one meal!

The interesting remarks by the "tory" spokes is that the "roof" was not repaired for "troubled" times. Who the hell allowed the roof to be fill with infrastructure holes?

Having an over valued currency would be more detrimental in a recession than an under valued one and imo it isn't under valued at its current level.

Mineral and energy prices are falling across the board so effect is probably slightly worse than neutral but the real effect is on the import and export of manufactured goods which is positive.

If the pound had risen to $2.50 then I would have been worried.

I'm inclined to agree that at $1.50 it's probably at a sensible level now, Dilbert. Looking at my monthly cable chart back to 1978 (as far back as it will go), the average price in those 30 years looks to be around $1.68, so realistically it's not too far below that avarage now. It's ranged in that time between $1.04 and $2.45, however, so there is still plenty of scope for an extension of this current move.

As long as it keeps moving why worry :-)

Ain't that what blokes always say? :P

hi fred i thought you was going to say they woujdn,t be able to pee/?//toy boys /

Target exchange rate $1 for 95p by Christmas.

Some quotes from the last few weeks!

OECD says UK is worst placed in G7 to withstand global downturn

The crashing financial sector is much more important to the UK economy than to most others even the US. At least until very recently, the financial sector accounted for 10 per cent of UK GDP, and a quarter of all income tax, and had been growing in importance since the 1980s at the same time as the importance of manufacturing has steadily fallen.

The final piece of the jigsaw is debt. UK household debt is the highest of the G7 economies at 109 per cent of GDP and has also been growing fast in recent decades.



In its major assessment of the global economys health, Deutsche Bank also warned that Britain is even more vulnerable than the US or the euro area.

What odds are the bookies offering on GB winning the next election? Everything he is doing and saying now is geared to an election victory in the next 18 months.

I doubt it, but he's sure shrewd....not that he engineered World Collapse (did he?), rather it has come to boost his position since there is "still" no competent alternative.
It might be an old WWII destroyer, with a duff main gun amd some holes, but it's a lot better than the proposed sailing-ship filled with concrete (alternative) - - - -if my drift is clear . . . . er...?

Do you mean a story colander.

Any economists out there?

At the moment the British government is printing money in order to "stimulate" the economy. OK this will probably lead to devaluation of the pound and inflation in the "short" run.

In one way the "printed money" is ring fenced and applies to the internal country finances. Of course the currency is devalued against other "stable" currencies.

If the IMF lend money to other failing economies, in which currency does it lend?

I know the hope, is that the depth is repaid, but sometimes it is written off.

How does this effect other currencies or is the size of the loan against the total "world economy" so small that it is inconsequential?

Sorry, but I am puzzled?


Another, irritation to me is whether figures are quoted in the media in American or British billions and trillions!

The media sropped using UK billions a long while ago.

You can get 9/4 labour winning the next election, any takers? Conservatives 1/3 not worth the risk, libs 150/1, maybe if the general electorate knew there might be a change in their fortune like strictly...!