Brown has lost his bounce, and a few things are going wrong, most notably the economy, as William Rees-Mogg summarises here. It appears that the credit crunch is feeding through into business interest rates, which have risen without reference to the Bank of England. Mortgage rates will probably follow as banks seek to fund loans from deposits instead of borrowing, and several have already started raising savings rates in anticipation. So, for the first time the levers of the economy have drifted away from the government, remember they set the inflation target for the Bank of England to aim at but if the Clearing Banks are doing their own thing than Gordon Brown and the BoE become bit players. Of course, they can cut base rates in effort to reassert their authority, but is that the right thing to do? If the Banks don't move their High-Street rates then it makes no difference anyway.
So, Brown is in trouble and even cheerleaders like Simon Heffer are laying into him, though in this case via a moronic economic analysis. When even New Labour apologists like Heffer turn against you then you know you've got a problem.
No comments:
Post a Comment