The culture if discounting is suicide, a panic measure to shift excess stock. It destroys the perception of the value of goods, and presumably will come to an end when stock is cleared and retail capacity has reduced to meet reduced demand. Once it is realised that inflation is back in the system, consumers will want to get what they really need as early as possible. This will apply very strongly to imported cars, where manufacturers costs are going to rise because of reduced economy of scale and emergency measures taken to survive the intense downturn.

Then it’s time to change the government and be straight with people about the fact our living standards are materially false as they are based on debt.
Banks should be merged or nationalised and profits returned to the people in lower taxes, so it is the living standard of the rich, rather than the poor masses, which is “cut”.

Now they have decided that much of the hit on our living standards will come from a huge fall in sterling, increasing the prices of the many items that we traditionally import, and limiting the favourable impact of falling commodity prices on the UK economy and incomes.

Then it’s time we started buying British goods and making British goods and selling British goods around the world with our new cheap currency, as China and India tried to do before we went flying into a recession as a result of not doing those things and instead relying on illusionary growth made on the back of debt.

We need to say bye bye to the old world and hello to the new, and stop thinking that our lives revolve around decisions made by The Bank of England. We actually need “POLITICIANS” to make decision not bankers.

The threats to cut interest rates to zero are part of the political programme. Economics has always been irrelevant to Brown except for its political implications. John Redwood does not see what is going on, as he cannot believe that such stupidity could ever exist. But Brown has demonstrated the extremity of his destructive nature for over 10 years now.

Believe your eyes, John. Brown’s trail of destruction has hardly begun. Sterling is his next target.

If that happens, it could very quickly lead to a hyperinflationary spiral if the MPC fails to restore confidence pronto – or worse still – starts printing money to pay higher salaries in line with the higher prices.

It’s very possible that it is just people like you “waiting and seeing” that is propping the currency up.

Just something very sobering to consider.

I suspect that come February there will be no market for anything, because Baldrick Brown will have taken any money we have left.

I also tend to think the correspondent above who predicts destocking of european goods may not be far off the mark. I have thought the quality of soft fruit particularly poor these past few months, but I can see how a seller of not particularly fast moving goods might try to keep stock down in the hope that the pound recovers later this or early next year ( when Mr Cameron inherits the mess? ).

Roll on that election…

There is no more reason for having a politically appointed committee to set interest rates any more than there is to have one to set exchange rates, minimum wages, tarrifs, quotas or anything else.

The least-bad solution to most things is to let the market set interest rates, which, even within the UK fluctuate between rates on government bonds (inflation plus 1%) to interest rates on credit cards (20% plus).

I personally have no idea whether a free market interest rate would be lower or higher than what the MPC says, and neither does any other individual.