Thursday, March 05, 2009

The economy and The Bank of England

The Bank of England will attempt to revive the economy by cutting interest rates and increasing the money supply. This will lead to higher inflation. We should also remember that the banks and other financial institutions recently worried about going into deflation. This might be bad for them, but lower price increases is good for the consumer. So it is my contention this latest 'plan' is to stave off deflation and aid the banks at a net cost to the consumer and not to stimulate the economy.


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