by Mark Johnston
An Appeal for More MoneyDuring the monthly meeting of the Bank of England’s Monetary Control Committee, there were loud calls for the quantitative easing to be started up again. Over the last three quarters of the year, some market and economic commentators have suggested that the economy as a whole has now become quite stagnant and that consumer confidence has plummeted and will continue to decline if there is no change in policy or direction. The Bank of England’s policymakers in the Monetary Control Committee (MPC) have been urged to consider emergency measures such as continued quantitative easing to stimulate the economy again. This was brought about after statistics seemed to suggest that the growth in the first half of the year was less positive than first thought. What some insiders have commented is that they are expecting that the MCP will agree to these emergency measure and will prime the economy with more money in November or December this year and may even extend this support into next year. The same insiders are also noting that there may very well be no change to the Bank of Englands base rate, which remains at a record low of 0.5 per cent, for some time yet. David Kern, the British Chamber of Commerce Chief Economist said “While the government must continue to implement its tough deficit-cutting programme aimed at stabilising our public finances, every effort must be made to reduce risks of a setback.”Staying the course, the Treasury will not alter direction and motivation away from the strict deficit busting austerity plan that they put in place when this coalition government was formed. Sticking to their plan, the government is staring the possibility of a double dip recession straight in the eyes. HIS Global Insights chief UK economist, Howard Archer said “the risk of renewed recession has clearly risen recently”. “The adjustments to the GDP history do not change the current situation which is of an economy struggling for growth in the face of major domestic and international headwinds.”With the state of the economy looking this gloomy and the bank of England base rate not looking likely to change, what is there for the first time buyers. The bank are using much more stringent credit checking score cards these days. With the crisis came changes and tighter regulation and rules around who banks are willing and able to lend money to and how much they are going to lend were inevitable. One more issue that house buyers are thinking about is whether, with further gloom on the horizon, they believe that house prices will drop even further. And so are holding off on making their purchases now and waiting for further declines in house prices.
Story link - An Appeal for More Money
Related stories to : An Appeal for More Money