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?

Poor Gordon! Maybe he is beginning to realize...


Gordon Brown has admitted that he has been "hurt" by the personal attacks on him during the failed attempt to oust him this month, and said that he might move to teaching after he leaves office.

Speaking to the Guardian in his first interview since the attempted coup by Labour backbenchers, the prime minister made an unprecedentedly frank series of observations on his time in office, reflecting that the recent weeks have been the worst of his political life.

"To be honest, you could walk away from all of this tomorrow," he said. "I'm not interested in what accompanies being in power. I wouldn't worry if I never returned to all those places - Downing Street, Chequers ... And it would probably be good for my children."

In an apparent acknowledgement of criticism of a lack of vision at the heart of government, the prime minister said he had found it hard to focus on strategic planning "as you have to deal with immediate events, like if a bank's going to go under".

For the first time, the prime minister conceded he wished he had imposed a tougher regulatory regime on the banking system, but said he "didn't want Britain to be outside the mainstream" and had been under heavy pressure to deregulate further. He also acknowledged that he "didn't know a lot about" banks buying up sub-prime mortgages during his period as chancellor, but argued that the global nature of modern banking meant such behaviour would "continue to happen".

Brown insisted that Labour under his leadership could win the next election, for two reasons: that the action the government had taken on the economy and MPs' expenses would start to bear fruit; and that the Tories had admitted that they would make deep cuts in public spending.

He said: "People know we've made these decisions to try to sort the economy out, but they don't yet see the results. Same thing on MPs. You're in that period between the implementation of your policy and the delivery of it."

On the suggestion that the results would need to start to show quickly if they were to be of any benefit to him, he said, "it's going to take some time". But he believed they would show in time for the next election.

The idea that any party in government would need to cut public spending was "a myth", he said, and the Tories' adoption of a strategy of cuts proved that they could no longer "talk about being mainstream".

Speaking about the tumultuous past month, Brown said that he "wouldn't exaggerate how bad it's been," but admitted that it was one of the worst experiences of his political life. Asked if he had ever been through something this bad before, he says, "in my political life, not so much".

In the interview he also:

rubbished the so-called Hotmail coup of Blairite ministers and backbenchers against him, calling it "the email that nobody signed".

said that there was now a "common purpose" between Peter Mandelson and him, and that the Labour party, famously resistant to the business secretary's charms, had finally come round. "People are coming to appreciate his talents in a way the Labour party didn't before ... I think there's a great affection for him now".

conceded that he had a weakness in how he presented himself to the public: "I'm not as great a presenter of information or communicator as I would like to be" - and claimed that he is not skilled at political manoeuvring - "I don't actually think I'm very good at it at all."

said that the internet means that "foreign policy can never be the same again". Because of the way information is now distributed, "you cannot have Rwanda again ... foreign policy can no longer be the province of just a few elites." He descibed this as "more tumultuous than any previous economic or social revolution" and said that "this week's events in Iran are a reminder of the way that people are using new technology to come together in new ways to make their views known."

said that he offered Caroline Flint, the former Europe minister, a chance to attend every cabinet meeting, which she declined. Flint resigned saying that Brown used women as "window dressing" and complaining that she was never invited to cabinet; he says he offered her "a promotion, not a demotion."

said "it's a strange life, really", and joked that the best way to run the country would be "from a train, getting around the country".

The interview took place over two long conversations in Downing Street earlier this month.

Bank chief wants to cut borrowing

The governor of the Bank of England, Mervyn King, has called for the government to show "greater ambition" in reducing public borrowing.

Plans set out in the Budget to cut deficits were not "clear enough", Mr King told MPs.

He said he was "more uncertain now than ever" on the prospect of the UK making a quick recovery from recession.

Mr King and other Bank of England officials were appearing before the Treasury Committee.

But the governor also said that the speed of any deficit reduction programme would depend on the speed of recovery.

"The scale of the deficit is truly extraordinary. 12.5% of GDP is not something that anybody would have anticipated even a year or two ago, and this reflects the scale of the global downturn," he said.

"There will certainly need to be a plan for the lifetime of the next parliament, contingent on the state of the economy, to show how those deficits will be brought down if the economy recovers to reach levels of deficits below those which were shown in the Budget figures."

'Genuine concerns'

Mr King also said it was too early to say how long the UK's recovery from recession would take.

"There are genuine concerns about how quickly the recovery will pick up. Looking at the clear evidence, [businesses] are finding it hard to access credit from the banking system," he said.

"A combination of that and real uncertainty over the global economy makes it very difficult to be confident of a rapid recovery."

The Bank's Paul Fisher added: "It could take two or three years before banks get really comfortable to lend again."

'Double dip' recession is occuring now, me thinks.


There are several reasons to doubt Greece's ability to push through its deficit-cutting plans. So expect more turmoil from that direction.

But more importantly, just because the EU has given the nod to the countrys spending plans doesnt mean the entire eurozone is saved. Quite the opposite in fact.

Now the markets are looking to call the EUs bluff. Portugal is the next target. Yields on its debt spiked yesterday. Its as if investors were saying: OK, so you might bail out Greece. But will you bail out Portugal too? Can you even afford to bail out Spain? And we havent even started on Italy.

After the Greeks came out with new, tougher plans, the markets started to look for the next weakest economy in the eurozone to sell. Portugals recent budget was not that impressive.

You have to feel sorry for Portugal. As Ian Campbell put it recently on Breakingviews.com, the country has suffered a bust without ever really having a boom. It didnt take much of a part in the European property bubble for example. Well before the fly-to-let psychosis was gripping property investors in Britain, the Algarve was a well-established, luxury property market.

And in dodgy debt terms, Portugal isnt Greece. In fact, Portugal isnt even Britain. Its fiscal deficit for 2009 looks like coming in at 9.3%, worse than the 8% expected, but hardly the worst offender in the world. Portugals real problem is long-term weak growth. Real GDP per head was actually lower in 2007 than in 2000, as Campbell points out. Over the same period, Spains standard of living had gone up 8%, Greeces by 10%, Irelands by 13%. Now of course, you could argue that Spain, Greece and Ireland are likely to lose all those cheap-credit-fuelled gains over the next few years.

But the real takeaway from Portugals situation is that the living standards of the population wont improve until the system works better. Growth has simply been too low to make the countrys population better off. The challenge now is to make this round of austerity useful for future growth. Pruning Portugals cumbersome state and excessive bureaucracy and trimming labour laws are priorities.

Things havent got any better for Gordon

Why would they?
The man is his own worst enemy.
And ours.

Gordo has made such a mess of things, perhaps he ought to be forced to stay to
clean things up

a financial asbo ?
:-)

Mervyn King is warning that the victor in next week's election will be forced into austerity measures that will keep the party out of power for a generation, according to the US economist David Hale.

perhaps merv thinks whoever wins will give him the sack.

BIGOT =

Brown
Is
Gone
On
Thursday

(Cribbed from elsewhere with thanks)