Wednesday, January 7, 2009
Why the Bank would be wrong to cut interest rates to 300-year record low
An article giving views on why the BOE would be wrong to cut interest rates tomorrow. Following the Fed towards a zero interest rate policy is wrong for three reasons. Cutting rates again is an error firstly because it will continue to miss its principal objective of kick-starting the economy, secondly because it is storing up inflationary problems for the future and thirdly because it is rewarding precisely the kind of behaviour which landed us in this mess in the first place.