Today's FT reports that Mervyn King believes the BOE will need to cut interest rates. However with so much hidden underlying inflation in the system will Gordon Brown and Labour want this? Its worth remembering that Gordon Brown still has emergency powers over the BOE, a cut in interest rates will threaten Gordon Brown's trump card, the strong pound, the very thing that is masking the real rate of inflation.


http://www.ft.com/cms/s/0/1aec57f6-92b7-11dc-b9e6-0000779fd2ac.html?nclick_check=1

Also from today's FT...are the days of the strong pound finally over?...if so watch Gordon Brown squirm!


"Sterling fell to a four-year low against the euro on Wednesday and gave up strong gains against the dollar and yen after Mervyn King, governor of the Bank of England, said UK growth would slow sharply next year"

From the FT: 15/10/2007

Sterling extended its recent losses on Thursday, sliding to a four-year low against the euro after a surprise fall in UK retail sales boosted expectations for a near-term cut in interest rates.

Figures showed sales fell by 0.1 per cent in October, bucking expectations for a slight rise, while a strong pick-up in sales in September was revised lower.

Analysts said the data added to the pressure on sterling after the Bank of England’s inflation report, released on Wednesday, suggested UK interest rates would fall and the central bank warned UK growth would slow sharply.

Don't shout to loud Tony, or he may consider it's time to join the euro..... We should have a referendom on that UNLESS HE CHANGES HIS MIND..... Regarding interest rates I don't think he will have much choice.... Anyway I thought the bank of England was independent!!!

The last thing the BOE should do is make a panic Interest Rate Cut. Inflation is much much higher than the mythical 2.1% figure.

We can not keep getting punch drunk on this debt bubble...
If the BOE just starts printing money again it will only hasten the crash, we actually need a recession to bring back stability in what is still in many ways an over heated economy.

Of course labour will let him ....

It's not their problem any more.