Typical of the BBC to protect Gordon Brown and Alastair Darling by inserting the word "international" in front of "credit squeeze" when correctly reporting this morning that the credit squeeeze is now hitting the "real economy".
Do you remember all those pompous commentaries from "experts" when the credit crunch first hit, assuring us this was just a problem for all those overpaid financiers and bankers in the City? Many took a dellight in the llikelihood of the well paid financial sector being brought to earth with a bump. This site said at the time this was a serious credit crunch which would have an impact on all our daily lives and on many businesses. So it is proving.
It is also a credit crunch made in Downing Street and Threadneedle Street. There is no home made credit crunch in much of Asia, and in the USA they are already moving to relax their credit crunch. Only in the UK this summer did the Central Bank resolutely tell bankers to sort themselves out, refusing to supply liquidity to markets and refusing to cut interest rates. I warned at the time they were being too tough.
Our accident prone Chancellor made a speech explaining that banks had made too many dodgy loans and needed to tighten up their lending. He warned banks there would be no bail if they did this, just days before he announced a gurantee for all bank deposits for any institution in trouble! We will now count the damage in falling property prices, cancelled investment projects, shortage of mortgages and loans and fewer jobs.
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
