I said months ago that Interest Rates will have to rise in the UK.
So now today we have 2 bits of news:
1. The recovery for last quarter was double than what was expected i.e. 0.8%
2. Interest rates will need to rise.
The first point is rediculous! We have massive unemployment, the banks are not lending, house prices are falling again, companies are going bust etc etc.
How the hell do they think we are recovering?? Even the man on the street can realize this isn't true.
On the second point, the Bank of England is always quick to raise rates at any mention of a recovery or good trade news. However, this isn't a proven recovery start and therefore any raise in rates will stop it again.
One point to make- IF the rates do rise you can bet your bottom dollar the banks will lend again when it gets to about 6 or 8%.
Unfortunately, no matter what Cameron says about the banks, he will not FORCE the banks to lend.
Ministers are too weak willed to do this !!
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