Who should you vote for in the UK if you want control of interest rates to revert to the Treasury? - highest investment interest rates
In 1997, New Labor has immediately given the Bank of England independent control over interest rates. The three main parties seem to agree
I do not see how it makes sense, one of the mechanisms that regulate the economy of the other to separate, for example, taxes and government regulation. I think the government should regulate only slightly, but should monitor all the mechanisms for it.
Using transfer of an interest rate for bankers and economists for the interests of commercial and financial sectors to enjoy the high, contrary to the requirements for the manufacture of the investment is low. In addition, high interest rates and low inflation in favor of the rich against the poor.
The bank uses interest rates to a large extent to the inflation of housing prices to prevent, although other negative effects of this policy. It would be better if the house prices selectively taken in the form of taxes.
Do you agree that these reasons indicate that the control over interest rates are back to the government?
Tuesday, January 12, 2010
Highest Investment Interest Rates Who Should You Vote For In The UK If You Want Control Of Interest Rates To Revert To The Treasury?
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5 comments:
I have tried to follow the logic in the subtext of your question.
Indirectly, the government still holds interest because he finds what keeps an acceptable level of inflation, the Bank of England as the basis for determining the level of interest rates used. Currently, the rate of inflation above target for the government, so that the bank will raise interest rates to dampen demand. Most economists agree that the actual level of inflation is higher than the action chosen by the government to measure inflation. You lose major expenditure items such as gasoline, taxes, mortgage payments. Therefore, if the level of the inflation adjustment, but also manipulated with a "measure of inflation, the government indirectly controls on interest rates.
In determining the amount of interest on the BoE for the sole purpose of the meeting of the government is calculated for inflation. You can at the same time, establish fees for the benefit of all sectors of the economy. The government, however, with low interest rates PoliCY for a number of years. As mentioned earlier, it has consciously with its underestimation of inflation ver-frequency, so that the BoE interest rates lower than it did the case.
However, the previous policy was pure politics. Through a policy of low interest rates, the government has encouraged heavy borrowing, inflation heats unprecedented home. Today, lenders are not in the amount that the funds are available, the deposit can offer them is limited, because they themselves loans from the money market.
It is a further blow to impact on the economy. For owners, the rich feel today, borrow against their inflated house prices, even on credit cards is an important factor for the economy because of the extra expense. The sums are absolutely huge. The result: a booming economy, the government is looking good for a while. However, we have reached a turning point because the inflation of housing pricescan not continue forever. Once that starts happening, the fundamental weakness of the economy to change the interest rates should (increase) to show in order to prevent people from borrowing more lightly, and inflation, the result of too much money in circulation in the economy. That's where we are today. The irresponsible policy of the government at home to rest.
I do not understand why you think that interest rates high performance commercial and financial sectors. In contrast, increases the price of capital, so that the demand for borrowed funds, and therefore, banks fall. Moreover, activity grew in the back of borrowed money falls. In general, all benefit from low interest rates, because it usually means that inflation is low, provided that the government has so far played.
Since we had unprecedented levels of low interest rates for a longer period, the BoE now sees the need to raise interest rates to stop the future clearly IRRESPOSSIBLE loans, exacerbatedProperty prices and inflation costs extra. Remember that we are now at a high price bubble in housing prices had tripled over the last ten years.
They say that the BoE to raise rates to avoid now, no new loans, thereby adversely affecting other parts of the economy. However, the bank would increase rates over a longer period, so that this huge price bubble in the settlement ever. The other thing I could do was to follow for establishing a strict legal limits for each mortgage loan borrowers. This was in the past that have done to prevent the speculative bubble in housing prices. Then have the freedom to pursue an interest in the interest of the rest of the economy, without trying at the same time, use it to control the irresponsible borrowing.
If governments have direct control over the interest rate adjustment, (even though I tried to argue that, indirectly, always), but find it easier to manipulate the interest rates for the cynical politics of destinationis more than what the interests of the economy.
No, absolutely not. What the politicians to decide when and how the increase or decrease in interest rates?
The decision by Gordon Brown in 1997 has been a long time. Result Note that the Conservatives would not have done if they did, the economy could be ruined.
Under the current system that we have a stable economy and a healthy growth too fast nor too slow, do not.
Transfer of an interest rate of the Bank of England was the best thing that Gordon Brown never. Before that, if the interest rates controlled by the government. When I bought my first property, there are about 18 years - has the interest of around 6% to 15% in a very short period of time - a result, The Fall of the House and negative equity - if you were to the eighties the memory of the embargo. Since the Bank of England's interest, we finally had some stability. If you think things are bad now - you have to, there were about 15 years.
I'm not a fan of the new employees or not, but the reservation of the B of E rate from politicians has been a very good measure. I often wonder how well sorry Brown
Tory votes
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