Thursday, November 06, 2003

Interest Rate start to go up again (after 4 years)

Ms Cook added: "The consumer has kept the economy going very nicely during the tough times of the last two years. It's now time for the rest of the economy to take up the running."

By getting people to promise away their future earnings at modest rates of return (for them) or large rates of interest (in the long run) for the lenders – basically, by swearing that we were ‘good for it’ - we have put off the ‘natural event’ of a leveller, bringing borrowing (particularly on houses) back in line. The idea that the consumer keeps the economy ‘going’ is crazy Bush/Blair Speak (after 9/11 we were urged to go out and spend) because we are also the workers (the 'rest of the economy') who aren’t being rewarded properly.

“Manufacturers had urged the Bank to sit tight over interest rates while the green shoots of a recovery in the sector take hold.”

Do these green shoots of recovery remind you at all of Chauncey Gardner and ‘everything will be all right in the garden….” ?

He added: "Despite more encouraging world growth, we should be clear that the economic recovery is still at an early and extremely fragile stage.
Most analysts are predicting a steady rise to a figure of 5% by the end of 2004."

We still measure ‘growth’ by GNP, which includes every wasteful activity, too, and is not a green measure at all – just an obsession with bigger, faster, longer, etc.
A quarter-point increase will add £9 a month to an average mortgage of £60,000 and nearly £15 to a mortgage of £100,000.
Savers should benefit from higher rates.

Savers? Don’t you mean the money lenders? Who else has money saved…?

If 0.25% raises a £100,000 mortgage by £15 per month, does that mean that going up to 5% (from 3.75%) would increase it by... a further £75 per month over the next year?

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