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Osborne's Plea To Get Banks To Create More Debt Now Wrong

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Why Britain's consumers and companies should ignore exhortations to borrow more
Economies such as the UK's don't recover in a real and sustainable way from traumas like the credit crisis without fundamental and lasting change taking place first.
By Damian Reece
Published: 10:18PM BST 05 Aug 2010
This recovery can't come until borrowers (not just lenders) learn the error of their ways. Three slides shown to analysts yesterday by John Varley, Barclays chief executive, provide evidence that those lessons are being learnt and that another of the changes needed for our economy to recover has taken root, albeit not yet complete..../

One of my favourite rants has made it to the mainstream press at last. Bottom line: unless and until we discourage indebtedness in this country we are doomed to repat boom and bust over and over again and each time it is going to push us further and further toward the brink. Osborne needs to allow the market to do what it is going to do eventually anyway: deflate the bubble.

"The banks need to get borrowers into deeper debt" needs to be replaced with "Get out of debt and pay off what debt you already have."

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RBS, which must lend £50bn to businesses under an agreement with the government, admitted that firms were still repaying loans faster than it could grant them, although it said it was "on plan" to meet the £50bn target. Net repayments by businesses were £1.4bn in the second quarter while net mortgage lending was £3.2bn in the four months from March to June, showing that RBS was lending more than customers were paying back.


It must be so tempting to develope a "business" that can extract some of that ...

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  • 415 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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