It`s raining stones again…

Nora Connolly

Image © Tmaurizia

When will UK interest rates rise?  Pundits recently suggesting an increase likely prior to the next general election, a scenario which would allow the Coalition to spin the policy as a by-product of economic recovery. Given that any decision made in this regard by the Bank of England must be linked to an economic upturn. This introduces a potentially nasty paradox, as economic recovery, either real or illusory (the latter more likely) could have dire implications for many UK households currently struggling to make ends meet at this time. All things considered, it might be prudent to avoid household debt at the moment, a view which is shared by those now running the British economy, not the Treasury but the Bank of England, after yesterday’s very British coup.  The recent announcement by the Bank of England to withdraw the funding for lending scheme had an immediate impact as “shares in construction companies plunged”.  But more significantly the financial stability report leaves Treasury policy undermined, while at the same time cleverly placing future responsibility for any UK housing bubble at the door of number 11 Downing Street. Read more of this post

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