Interest Rates hit a record low!

Story link: Interest Rates hit a record low!

It seems that all we see in the press these days, but if you think of the impact the interest rates are having on the UK economy as a whole as well as hundreds of individuals, then you can see why.

Interest rates are now sitting at their lowest every, at 1%!

Interest Rates hit a record low!

The Bank of England fired the fifth shot in its series of panic interest rate cuts that have taken the base interest down from 5% in October 2008 to 1% today. This follows the crash in UK GDP for the fourth quarter of 2008 which contracted by -1.5% and is inline with earlier analysis that projects towards an additional 3% GDP contraction for 2009.

Monetary Policy is failing which is prompting the government to adopt quantative easing “money printing” this can take many forms, but that which has the greatest impact is the Bank of England buying government debt, which has the direct effect of devaluing the currency as the supply of money soars. Printing money has never EVER been the answer, history is littered with the political elite opting to take the short-term quick fix at the direct cost of the long-run. In today’s Britain the clear objective is for the Labour Government to work towards the May 2010 election deadline which has prompted policies that are destroying Britain’s wealth and future growth which has been reflected in the crash in sterling against all major currencies of more than 30%, for the government cannot hide money printing from the currency markets. Similarly UK debt has been marked lower in the wake of the increased liabilities of the banking system that the Tax payer is guaranteeing.