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Imf: Uk Faces Credit Rationing Or Higher Interest Rates Unless Bank Prints

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http://www.guardian.co.uk/business/2009/se...uk-imf-recovery

Britain will face credit rationing or higher interest rates unless the Bank of England continues its emergency money creation programme to support growth, the International Monetary Fund warned today.

Highlighting the risk of a £180bn funding gap in 2010, the IMF said there was a "significant tension" between the supply of finance from a weakened banking sector and rising demands for funds, primarily caused by the soaring government deficit.

José Viñals, the IMF's financial counsellor, said that despite avoiding a global meltdown, the shortage of credit and the pressures on government finances posed risks to recovery.

Launching the fund's half-yearly Global Financial Stability Report (GFSR), he said the UK was likely to face "difficulties" in meeting the demand for credit.

"Either there will have to be continuing support on the part of the authorities to underpin the credit process or there will be higher lending interest rates, or credit will be constrained."

The comments provided clear support for the Bank of England's programme of quantitative easing (QE), which is designed to compensate for the inability or unwillingness of banks to lend.

For the first time since the financial crisis began in August 2007, the fund cut its estimate of the write-downs facing banks and other financial institutions. In the spring it predicted a $4tn bill (£2.5tn) but has now pared this back to $3.4tn.

"Over a year has now passed since the Lehman Brothers bankruptcy prompted a potential global financial meltdown," said Viñals. "Fortunately, the situation is very different today due to unprecedented policy actions and the overall improvement in economic conditions. We are on the road to recovery, but this does not mean that risks have disappeared."

Viñals added that countries such as Britain, which had high levels of debt relative to the size of the economy, were particularly vulnerable to higher long-term interest rates because of fears about the sustainability of the public finances.

In August the Bank of England increased the QE budget to £175bn, following a meeting where the governor, Mervyn King, was outvoted in his attempt to raise the ceiling to £200bn. Discussions continue within the Bank on what additional measures – possibly extra quantitative easing or even negative interest rates – it could take in the future.

Although Viñals' comments do not amount to an explicit call for more QE, they do indicate that the IMF would not stand in the way of an enhanced programme by the Bank of England to increase credit availability.

David Miles, a member of the Bank's monetary policy committee, told a conference in Belfast this morning that QE was having an impact, although it was hard to say how much exactly. Miles added that he saw little reason to proceed particularly cautiously with QE as the policy was "not irreversible".

Printy printy.

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Highlighting the risk of a £180bn funding gap in 2010

£30,000 of debt required per man woman and child, to keep us going for just one more year...

healthy

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How do you make this big on the screen, instead of 'Reduced by XX%'?

Insert a link (URL) to your picture using the second button along under the "fonts" menu when composing. Don't download it and then upload it to this website.

To get the link to a picture on another website, right click on it and choose "properties". Then cut and paste it's full URL as shown into the "insert picture" box you get when you press the "insert picture" button.

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The choice is interest rates rise or printy.......Gold is cheap @ $1000 oz

So the choice is still deflation or inflation.

We know what has happened to date, but we're not any more certain as to where it will go from here.

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:blink:

But...I thought...they!........ffs... :blink:

Right...they all been saying defaltion on here though... :huh:

They even presented pop charts and graffs......you know what.....looks like DaddyBear and Injin have both been correct and some folk on here will now need to and admint that they were wrong.

The choice is interest rates rise or printy.......Gold is cheap @ $1000 oz

:lol:

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Guest P-Diddly
Insert a link (URL) to your picture using the second button along under the "fonts" menu when composing. Don't download it and then upload it to this website.

To get the link to a picture on another website, right click on it and choose "properties". Then cut and paste it's full URL as shown into the "insert picture" box you get when you press the "insert picture" button.

wot :unsure:

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Guest P-Diddly
Or transfer the pic to an image hosting site; remove spaces as in the line below to show the picture.

[ IMG ]http://i231.photobucket.com/albums/ee218/yellerKat/80932-big.jpg[ /IMG ]

80932-big.jpg

wot :unsure:

Look, it took me two years to log into and post on this forum, I sh!t you not.

Signed up in 2005 and couldn't figure out that you had to do a introduce yourself post first, in that other bit.

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£30,000 of debt required per man woman and child, to keep us going for just one more year...

healthy

If that figure is right I'm going to the toilet, NOW. LOL!

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Guest Daddy Bear
wot :unsure:

thumb_4740_image1_50_pound_roll1.jpg

P diddly - I'll sort you out mate...

1. Find the image you want on google images or wherever

2. click on it

3. press right mouse button as you hover over it

4. Select "copy image location"

5. Then when replying to a message...... to insert image click on "insert image" button (2 to the right of smiley face icon - below the word Fonts)

6. Remove "http" and click on right mouse button and paste in saved image location. The URL will appear in your notes with either side of it

7. Hey presto - big image.

Have a few go's so i know you've understood - mind make sure they are good images

DB

Edited by Daddy Bear

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Guest Daddy Bear

Mail0003.JPG

It's this easy.

God I AM gorgeous.

edited: as I had put I as "i"... :rolleyes:

Edited by Daddy Bear

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Guest Daddy Bear
So the choice is still deflation or inflation.

We know what has happened to date, but we're not any more certain as to where it will go from here.

Sadly I don't think most on here do "know what has happened to date".

What has "happened to date" in your view?

DB

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Guest P-Diddly
thumb_4740_image1_50_pound_roll1.jpg

P diddly - I'll sort you out mate...

1. Find the image you want on google images or wherever

2. click on it

3. press right mouse button as you hover over it

4. Select "copy image location"

5. Then when replying to a message...... to insert image click on "insert image" button (2 to the right of smiley face icon - below the word Fonts)

6. Remove "http" and click on right mouse button and paste in saved image location. The URL will appear in your notes with either side of it

7. Hey presto - big image.

Have a few go's so i know you've understood - mind make sure they are good images

DB

I . . . I . . . I'll 'ave a go now.

This could take a while.

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Guest theboltonfury

2006-05-04-Kelly.Brook.HQ.01.th.jpg

thumb_4740_image1_50_pound_roll1.jpg

P diddly - I'll sort you out mate...

1. Find the image you want on google images or wherever

2. click on it

3. press right mouse button as you hover over it

4. Select "copy image location"

5. Then when replying to a message...... to insert image click on "insert image" button (2 to the right of smiley face icon - below the word Fonts)

6. Remove "http" and click on right mouse button and paste in saved image location. The URL will appear in your notes with either side of it

7. Hey presto - big image.

Have a few go's so i know you've understood - mind make sure they are good images

DB

I can never do this either. Let's see if this works....

Edit it does. Now that's much better than QE isn't it. Cheers DB

Edited by theboltonfury

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