Tonight:
9°c
One per cent off now and another, possibly more, by next summer. At last, too, some banks are finally passing on the rate cuts to customers - several of the big banks are saying they will make similar reductions. Borrowers, it seems, have never had it so good.
So too, have shoppers, judging by the crowds flocking into Marks & Spencer today for another of their 20 per cent one-day sales.
It's hard, though, not to think that this is a short-term fix.
The sense of euphoria the Bank of England, M&S and others hope we enjoy is not a permanent solution. We may feel a bit better now, but are we really? One group definitely not cheering are savers (perhaps that explains the number of old folk piling into M&S. They haven't got mortgages, the rate cut harms not helps them, so what the hell, they might as well spend it). This rate cut may give us a lift in the run-up to Christmas but it will not last.
Likewise, the sales of M&S and its rivals. Come the new year, when job cuts have started to bite, the mood will be very different.
Our economy is in a bleak space - you only have to look at the falling pound to see what the rest of the world thinks. The days when manufacturers could at least derive some benefit have long gone. We import much of what we consume and the pound is buying less.
Every time, too, the Bank behaves in this fashion, it's difficult to avoid a queasy feeling. From not having done very little for years - apart from encouraging people to borrow up to the hilt - it is now lashing out. There's a sense of institutional panic, which only weakens confidence.
What it will take is patience. The world is in recession, not just Britain. Bigger economies than ours have to turn. American property prices must recover, factories across the globe have to begin humming again. When that happens, Britain will pick up. All we can really do is wait.
Reader views (7)
They screwed up with a arrogance which is breath taking. WE are in a good financial state say's un-elected buffon Brown and dear old Darling the court Jester is scrapping and bowing to the un-elected Buffoon Brown.
" Don't be alarmed we are going to borrow our way out of this mess I have created he say's " He tells his doppy cabinet dont worry I will blame the american's, the british public won't catch on that I have screwed up big time. Now we have this problem interest rates coming down for the house owners and businesses, Ok so far, but here's the catch. Saver's left with very little retun on their money in their accounts. So savers will start looking for better deals outside the borders of this country, and guess what the banks will start running out of money. Do not think these government bailout money will keep the wolf from the door it wont. So low interest mortgage payers make hay while you can, this indian summer will soon go by the interest rates will start climbing, and fast. By the end of next summer is a good guess. And you what the great british public will still vote these buffon's back into power. Including their legions of PC moron's
- Ebin Donk, UK
What joy? There's no joy for the savers, particularly silver savers,we're being punished for being prudent.
- Derek, London
Encouraging people to spend in order to limit the effect of recession has to be the most worrying government policy yet. As we all know, too many Brits have already borrowed well beyond their means. Where is this taking us? As for savers, they may as well spent what they have got as it now makes no sense at all to save. We should all be very worried.
- Daniel, London
John/Leighton Buzzard:
"all of them blew away manufacturing capacity in favour of cheaper Asian products"
And just who would have bought this more expensive British manufacturing? To compete with 'Asian prices' you'd have to have Asian wages - would you countenance that?
The damage has been done these last ten years by Labour - and it's still being done by 'The Great Helmsman' in his retarded approach to the downturn that will end up bankrupting us and putting interest rates through the roof.
This is a recession made by Gordon.
- Gb, London, UK
I couldn't agree more John, well said.. Decades of 'free markets' has resulted in nothing more than phony wealth based entirely on unchecked borrowing and cheap credit. I personally would like nothing more than to see those rich bankers and other idiots who 'overextended' (isn't that a lovaly PC word?) themselves to go under, but thats just my opinion..
- Ben, Maidenhead, Berkshire
Actually, manufacturing was is great health when the Conservatives lost power.
- Nigel, London
I am fed up to the back teeth listening for years to the bull from the "Conservative" movement, first from Reagan, Freidman,Greenspan, Thatcher, and now Blair and Brown all of them blew away manufacturing capacity in favour of cheaper Asian products and failed to renew our infastructure. The bedrock of Conservative/Nu Labour Toryism policy is that markets are allowed to get away with anything they want then when it goes pearshaped the losses are socialized. So much for prudence and tight government spending and their supposed hatred of socialism. All done to the drumbeat of a militant society bent on everyone's destruction, especially its own.
Day after day the damage is revealed. The absolute contempt these politicians have toward the general population is astounding, self-destructive, and so wide of the mark to the point of total BS. If this had been 18th Century France the guillotines would have been hard put to keep up with the flow.
- John, Leighton Buzzard, Beds
