Thursday, November 06, 2008

The pound in your pocket

Is going to be heading a long way south if interest rates crash.

The truth is the economy is out of control. Banks won't lend any money to risky prospects - which is nearly everyone at the moment.

They will however be able to drop savings rates whilst keeping mortgages high.

The tax payer has bailed them out - and now they will spend their time on mergers and finding ways to pay large salaries without the government noticing.

Get ready for the next stomach churning down turn of the economy as the failure of the Brown plan becomes all too apparent.

Update: On the day of the 1.5% interest rate cut the pound actually increased in value against the dollar and euro, but this inverse response is being corrected the day after. My guess is that parity with the dollar and Euro can't be far off.

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