Interest rates fall as Brexit moves ahead in the polls

The desperate Remain campaign have been predicting higher interest rates if we leave.

Why then have official interest rates plunged since January whilst expectations of Brexit have risen?

 

(10 year official bond rate fallen from 2% around the opening of the year to 1.29% on Friday)

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62 Comments

  1. William Long
    Posted June 5, 2016 at 10:25 am | Permalink

    This is something of a two edged sword though: there are plenty of people like me who would be delighted with a proper return on un-invested cash! There are also valid reasons for thinking that higher interest rates would be of benefit to the economy, not least in lowering pension deficits.

    • Jack
      Posted June 6, 2016 at 1:08 am | Permalink

      All of the top central bankers, along with the vast majority of economists, believe that lower interest rates are inflationary and high interest rates are disinflationary. Real world evidence shows it’s the complete opposite, and here’s why:

      1) Banks lend based on income. Interest rates are not as big a consideration as the mainstream makes them out to be.

      2) Lower rates directly reduce government spending and the budget deficit.

      3) The propensity of savers to spend their interest income is greater than borrowers borrowing to spend. And on top of that, the economy as a whole is a large net saver holding lots of government bonds.

      4) Lower rates imply lower storage costs for businesses, dragging down inflation.

      As a result of these reasons, lower interest rates directly reduce demand and total spending in the economy, and are categorically not inflationary in any sense.

      That being said, the natural rate of interest is zero, and it should be left there forever. Without central bank manipulation of the interest rate market, the “interest rate” will always drift back to 0%. So I don’t support increasing interest rates as the solution to our problems. Instead, cutting payroll taxes and increasing government spending are far better ways to stimulate demand.

      • Gary
        Posted June 6, 2016 at 7:34 am | Permalink

        Falling rates destroy capital. Falling rates are deadly. Replacement costs of capital rise as rates fall, because the present value of debt to purchase new capital rises. The burden of debt (the total owed) rises with falling rates. Falling rates is a cancer that transfers capital to the financiers who are causing the inflation and away from manufacturing businesses. It is no surprise that manufacturing has been dying. “Growth” by dropping rates is like boosting exports by devaluing the currency, it is a Pyrrhic victory that later comes at a terrible cost.

  2. Jerry
    Posted June 5, 2016 at 10:49 am | Permalink

    This sort of piece is getting ridiculous! But what if the falls have nothing to do with the referendum, as you said yourself before, markets rise and fall for all sorts of reasons. There is a distinct tone to your entries emerging, bad news has nothing what so ever to do with a possible Brexit referendum result, good news though has everything…

    Reply I am responding to idiotic forecasts by Remain! Lighten up a little – I do like to tease Remain sometimes.

    • Edward2
      Posted June 5, 2016 at 8:16 pm | Permalink

      Why “idiotic” Jerry?
      When the markets react negatively Brexit is blamed
      but when the markets move the other way Brexit gets no praise.

    • Yosarion
      Posted June 5, 2016 at 8:45 pm | Permalink

      Behave John, in The Beginning Was the Word and The Word Was Remain!

    • Richard1
      Posted June 5, 2016 at 11:07 pm | Permalink

      Obviously comparable bond yields have also fallen. But it’s a valid observation by JR nonetheless. Brexit now has a c 25% chance according to bookies. If it’s the disaster Remain make it out to be you would expect some of this risk to be priced into sterling and into the stocks of all those Intl businesses which we are informed will suffer so much post-Beexit. The market will always try to anticipate the outcome not just wait for it. But there’s no evidence yet of such an effect.

      I think Leave should just say lets go for a Switzerland type deal, which would make things very clear – in the single market but outside the political institutions and clearly no liability for the euro. Let’s accept free movement but maybe at least get the right to block EU criminals as we do non-EU. It should be possible to get that agreed. At the moment it’s too vague and I think the recent focus on immigration and the new line that we don’t want to be in the single market is a mistake.

      • Know-dice
        Posted June 6, 2016 at 7:01 am | Permalink

        I guess there is “free movement” & free movement…

        Free movement could mean visa free travel, but you need a job offer before being allowed enter to work (and claim any benefits). And the right to refuse entry based on previous criminal record.

    • Jerry
      Posted June 6, 2016 at 8:00 am | Permalink

      @JR reply; Whilst no doubt Remain will claim that they are responding to idiotic claims from Brexit, the rest of use call it Cherry Picking of the facts (from both side)!

      As for lightening up, perhaps after June 23rd, after all that was all one Mr Kinnock was doing when he attempted to lighten up at that eve of poll event, lightening up turned into foot-in-mouth time…

      @Richard1; So you want Brexit but then want the post Brexit government to sign up to -in effect- the agreement that the Swiss have, including the best part of (or should that be worst parts of) the Schengen Agreement!

      Brexit, if there is going to be one, should mean exit. If we can not survive economically outside of the EU’s grasp then perhaps we should not have a Brexit.

      • Richard1
        Posted June 6, 2016 at 10:55 pm | Permalink

        I’ve always thought the Swiss have the best deal – full access to the single market, WTO membership, out of CAP, no obligatory green crap etc. Low taxes – they will never accept the EUs harmonisation there. But yes it’s free movement and they bung the EU a bit of dosh. I had hoped Mr Cameron would come back from his renegotiation with something similar whilst remaining nominally ‘in’. Had he done so I would have supported it enthusiastically.

  3. Lifelogic
    Posted June 5, 2016 at 10:57 am | Permalink

    As indeed logic would suggest.

    The UK will be a far better credit risk away from the EURO bail outs, a free democratic country, with far less red tape, cheaper non green crap energy, sensible selective immigration on the world wide, merit only & non racist basis and no huge membership fee to pay either.

    It will surely fall further if we can also could get a sensible & competent chancellor such as JR.

    • Dan H.
      Posted June 6, 2016 at 12:49 pm | Permalink

      Past performance is very often a guide to future performance. If we compare EU Eurozone countries, EU non-Euro countries and non-EU countries in Europe, we see an interesting trend: the more involved with the EU and the Euro a country is, the less well its economy seems to have been doing in the past.

      Past behaviour of politicians and political structures is also a decent predictor of future behaviour. Look, if you dare, at what happened the last time the EU had a big financial crisis, namely the rampant corruption in Cyprus. What happened was a not-very-stealthy raid on the money held in bank accounts there, or rather the money held there after a warning shot had been fired across the bows of that country.

      After the warning shot, the actual corrupt money vanished like mist in a furnace; the corrupt accountants had long suspected such action from the EU and were duly prepared to do a flit. The EU managed to administer a haircut to the honest and the stupid, a tiny minority of the total.

      We can therefore expect that when the inevitable EU banking crisis hits (the steadily worsening debt to GDP ratios of most of the Club Med countries make this inevitable) a similarly inept series of raids upon the bank accounts of private citizens will be launched, to try to put off the inevitable, whereas the smart money will long have departed to sunnier climes.

      This leaves us with a stark choice: do we want to be in the mire with all the other patsies when the disaster hits, or would we prefer to be the financial safe haven for a proportion of the smart money departing a collapsing EU? Morally we perhaps ought to assist the EU in their time of need, practically we ought to let them learn their lessons the hard way and profit whilst they do so.

  4. Lifelogic
    Posted June 5, 2016 at 11:07 am | Permalink

    As Andrew Neil pointed out on the Sunday Politics Major’s ad hominem attack on Boris the current favourite to be the next Tory leader were astonishing. With hampsters and a python, accusations of deceit, threats of disloyalty and playing Brexit are racist card yet again.

    When he did this why did Marr not ask what he meant by these pathetic slurs?

    After all it was Cameron who gave us the “no if no buts” to the tens of thousands promise, knowing full well he could not deliver this from inside the EU.

    • Lifelogic
      Posted June 5, 2016 at 12:04 pm | Permalink

      Listening to Majors attack again it was rather astonishing especially his NHS attacks and Brexit are racists slurs- rather like being savaged by a dead sheep – as Denis Healey might have put it.

      • bluedog
        Posted June 6, 2016 at 12:15 am | Permalink

        Regrettably Sir John Major gives every indication of two things. Firstly he seems to remain in denial of the epic disaster of the ERM (he may not understand what went wrong). Secondly Sir John continues to give the impression that his success is the result of the patronage of Margaret Thatcher and not the result of any particular genius of his own. This latter point is proved by the somewhat grudging reluctance with which Sir John ‘defends’ Margaret Thatcher’s legacy. A peerage must surely be in the offing.

      • stred
        Posted June 6, 2016 at 9:32 am | Permalink

        Sir John’s government finished my professional career. I don’t know how he dare show his face after his disastrous bout of incompetence. This cheered me up today.
        http://www.telegraph.co.uk/news/2016/06/01/telegraph-cartoons-june-2016/

  5. CHRISTOPHER HOUSTON
    Posted June 5, 2016 at 11:40 am | Permalink

    ” The desperate Remain campaign ”

    Doesn’t it speak volumes, that after weeks of biased tax-payer paid propaganda from the Remaindians that a few still edited soundbites from leading Brexiteers and just one combative interview with Mr Gove…..that “desperate” is the case for Remain.

    From what I gather, any initial disruption on Brexit has already been factored in, anticipated, by the market at large. The BoE is making a meal the size of the Last Supper import on the matter. A cut in staff at the BoE may prove good housekeeping for them. They should turn to page two of their very own Economics Book ” The Law of Diminishing Returns Made Simple ” or they could import 20 foreign books in 20 different languages on the same topic and have them translated into plain English.

  6. Lifelogic
    Posted June 5, 2016 at 12:00 pm | Permalink

    Indeed and the odds have shortened from 4.5 to 2.5 on Brexit. Still a good bet at those odds I think.

  7. CHRISTOPHER HOUSTON
    Posted June 5, 2016 at 12:15 pm | Permalink

    Why can’t the Remain Campaign show a modicum of responsibility?

    Campaigning is campaigning and we all understand you push your own case BUT since the Campaign started, months ago for them, weeks ago for us, The EU trade talks on TTIP with the USA have hit insurmountable roadblock (s ). So too, I hear the ratification of that with Canada . No progress with EU talks with China, India, Russia. And the Remain Camp possess intelligence. Yes, I know they hide it very well, but they do. They know about these things, these events, and no amount of genuine talking by the EU is going to solve them. It is structurally impossible.
    Darnnit even if we had a dream of EU, we would have to wake up. The EU ship is sinking.

    • turbo terrier
      Posted June 5, 2016 at 8:28 pm | Permalink

      Christopher.

      Well said. I find it very strange that no mention is ever made of the state of the French and Italian economies.

      I think it is too late to save because there are some very large holes in the hull.

  8. Denis Cooper
    Posted June 5, 2016 at 12:19 pm | Permalink

    I suspect that the reasons are related to your earlier post headed:

    “What experts say without the media present”

    To enlarge on that, there are many other things going on in the world and its economy and the increasing likelihood that the British people may vote to modify their treaties with their European neighbours is seen as one of the least important factors in that wider context, notwithstanding the (words left out ed) Christine Lagarde obliging our Prime Minister by publicly warning that it could trigger a global economic meltdown.

  9. Gary
    Posted June 5, 2016 at 12:36 pm | Permalink

    or rates are falling because the markets believe that without German restraint, the uk can print with abandon.? the more you print money(supply), the lower the price of money.

    I am agnostic on this EU in/out. I believe our problems are global and are rooted in banking. in or out won’t solve the problem. it won’t even address the problem. the markets are suggesting the problem may get even worse imo

    • bluedog
      Posted June 6, 2016 at 10:04 pm | Permalink

      The entity that is starting to print with abandon is the ECB. There is no alternative unless the German banking system is to be sacrificed, and that ain’t going to happen. Returns on capital in the German motor industry are plummeting in the face of competition too. With 47pct of GDP dependent on export activity the German economy is vulnerable to slowing demand for manufactures, and currently on a knife edge. The economic case for Remain collapses if Germany joins the PIGS. Not out of the question.

  10. A.Sedgwick
    Posted June 5, 2016 at 12:48 pm | Permalink

    I thought Andrew Marr was appallingly biased in his show with Messrs Major and Johnson.

    • turbo terrier
      Posted June 5, 2016 at 8:30 pm | Permalink

      A. Sedgwick.

      Second that

  11. acorn
    Posted June 5, 2016 at 2:15 pm | Permalink

    Punters have been dumping equities and buying fixed interest, pushing up prices (lowering interest rates). Just worry about the currency exchange rate. If the Pound (and Euro) drop on Brexit, someone has to stop the BOE, panicking and jacking up base rate. Play it cool and take the hit. It is unlikely that foreigners will be dumping their Chelsea houses. They all are probably hedging in Swiss francs anyways. 🙂 🙂 🙂

    Reply The pound has been rising too!

    • Leslie Singleton
      Posted June 5, 2016 at 9:25 pm | Permalink

      Dear Acorn–It would help if these all-seeing (I don’t think) economists we hear about had even a glimmer of an idea or consensus on whether they would like the pound and interest rates, not to mention inflation, higher or lower. Most of what I understand about what economists have to say (which is not much) I don’t believe. So far as I’m concerned the pound should blindingly obviously go down and ditto interest rates up. The latter are ridiculously out of kilter on any basis and to hell with the economics. No I didn’t read PPE.

  12. Matt
    Posted June 5, 2016 at 2:46 pm | Permalink

    If the cost of borrowing had risen it would have been because of fears of Brexit, but as its fallen it will be a coincidence.

  13. Denis Cooper
    Posted June 5, 2016 at 4:36 pm | Permalink

    Off-topic, from the Mail:

    “… it was reported that a Royal Navy warship could be deployed to the English Channel to pick up migrants crossing the sea from France.

    HMS Sutherland – already at high readiness defending Britain’s coastline – could be tasked with saving hundreds of migrants and dropping them off in the UK.”

    This is how the government misuses the navy that we pay for – not “defending Britain’s coastline”, as we expect, but providing a free ferry service for illegal immigrants.

    • Jerry
      Posted June 6, 2016 at 8:07 am | Permalink

      @Denis Cooper; “This is how the government misuses the navy that we pay for – not “defending Britain’s coastline”, as we expect, but providing a free ferry service for illegal immigrants”

      Oh right, so we should leave people to drown [1]. If that is the moral compass of the europhobes then count me out of this Brexit stuff, and I suspect that I’m far from alone in that sentiment…

      [1] after all we could just track then and if they do make it to shore detain them then.

      • Edward2
        Posted June 6, 2016 at 11:24 am | Permalink

        I think Denis, like me, would prefer the Royal Navy to pick up these people and return them to their starting point.
        No one is suggesting we leave them to drown.
        You are getting a bit carried away Jerry.

        • Jerry
          Posted June 7, 2016 at 5:13 am | Permalink

          @Edward2; Then tell that to the UN, after all that is the international organisation that make the rules, or perhaps we should give up out seat at the UN just sop that we can ignore their rules. Oh and one other thing, of course the French could pick these people up but as the French mighty well have to enter our territorial waters to do so would they not need to still bring them ashore in the UK?

      • stred
        Posted June 6, 2016 at 11:34 am | Permalink

        UN rules stop Home Office lawyers detaining them. Why not dispense with these too and as French waters are not dangerous, why not take the inflatables back to Le Havre or Juno Beach and put the illegal migrants back in but with a small puncture allowing a range suitable for going back to Shengen land.

      • Denis Cooper
        Posted June 6, 2016 at 1:16 pm | Permalink

        Did I say that we should leave people to drown?

        • Jerry
          Posted June 7, 2016 at 5:14 am | Permalink

          @Denis Cooper; Well you seem to be objecting to the only other course of action open to the British!

          • Denis Cooper
            Posted June 7, 2016 at 8:34 am | Permalink

            They come from France, so they should be “dropped off” back in France NOT in the UK. If the French refuse to have them back then we need to find somewhere else to take them, definitely NOT in the UK because we know that once they are here it will be virtually impossible to remove them and that will simply encourage more to try their luck. I should have thought that was obvious.

            You frequently try to put words into other peoples’ mouths, Jerry, it is your style, and you should stop doing it.

          • Jerry
            Posted June 8, 2016 at 12:17 pm | Permalink

            @Denis Cooper; Best you tell that the the UN them, I might not like the result but it is good that the UK uphold international law and doesn’t act like some 3rd world dictatorship.

      • Anonymous
        Posted June 6, 2016 at 6:01 pm | Permalink

        Jerry – Your answer then is, effectively, to escort. This will encourage more to make the same trip, despite them not being in any danger in France.

        If a British person put themselves in such peril – say, for a foolish leisure activity – what would you call them ?

        Our country is being invaded by criminals. Once here they will not be deported and you well know it.

        I don’t expect Brexit to achieve much – not for a while. I’m determined to vote out to shove the likes of you off your high horses.

    • stred
      Posted June 6, 2016 at 9:45 am | Permalink

      Have they had another name competition and called the ferry after Peter Sutherland, the UN agent for the advantages of mass migration. (ex Goldman Sachs of course).

  14. Anonymous
    Posted June 5, 2016 at 5:03 pm | Permalink

    Dare I say it. I know very few people who intend to vote Remain and many who intend to vote Leave.

    Project Fear really has pissed a lot of people off.

    The fatal mistake was putting David Cameron at the head of the Remain campaign. He has such a privileged and patronising way about him.

    • libertarian
      Posted June 5, 2016 at 8:51 pm | Permalink

      I am very firmly out.

      I’ve seen a lot of posts on here saying I barely know anyone who is remain.

      Well I mix with 100’s and 100’s of people and I have a very large following on social media and I estimate of the people I come across 2 thirds are remainers. The reasons they give are either nonsense stuff like workers rights, or its just virtue signalling as being seen to like other cultures is perceived as being righteous.

      Most retainers have never given a single verifiable reason for staying in that couldn’t also be achieved having left. Thats the problem with democracy though.

      • Narrow Shoulders
        Posted June 6, 2016 at 6:06 pm | Permalink

        My experience is similar to yours @lib. I think remain will win through a mixture of inertia, misunderstanding and misplaced virtue.

        Many of those who I thought would like independence feel it will be ‘just too difficult’; wouldn’t vote to join it in its current guise but too difficult to change.

        Leave must highlight change will be gradual either way. Boiling frog syndrome staying in, cutting one mesh of the net at a time getting out.

        There will be no sudden scary movements.

      • Anonymous
        Posted June 6, 2016 at 6:08 pm | Permalink

        Libertarian – There have to be a high proportion of Remainers somewhere, if polls are to be believed, but they are not in this vicinity.

        Have the 100’s of 100’s of people you know all told you their voting intentions ? Really ?

        Never mind.

        We’ll get to see how Remain turns out and Brexit can’t be blamed.

    • Leslie Singleton
      Posted June 5, 2016 at 9:34 pm | Permalink

      Dear Anon–Till recently I did not think it conceivable, possible even, that a PM would head up, indeed be allowed to head up, either campaign. This latest Swiss referendum for instance–I don’t know, but I’d be willing to bet a cheap bottle of wine that the President or whoever would have shut the eff up some time back. That apart, Cameron’s problem is the ease with which he tells bare-faced lies. Everybody knows not to trust him on anything.

    • Douglas Carter
      Posted June 5, 2016 at 11:23 pm | Permalink

      He’s not necessarily the ‘head of the Remain Campaign’ – officially, Sir Stuart Rose takes that platform.

      However, in an unofficial capacity, Cameron most certainly has adopted the stance of official Remain campaign leader.

      With the extensive plethora of lies and intentional deception of the electorate, he has – even to those with the most marginal grasp of politics – established himself as a profoundly unsuitable figure to hold any form of responsible office.

      After June 23, no matter the Referendum result, he will have to be removed from his post. Only the most cowardly form of MP would refuse to move against him. Proper democracy deserves nothing less.

      Only the most Cowardly form of MP would accept his continued tenure.

    • Lifelogic
      Posted June 6, 2016 at 4:53 am | Permalink

      Cameron would have been sensible to stay well above the fray.

      But then he nearly always gets things wrong.

  15. Qubus
    Posted June 5, 2016 at 5:14 pm | Permalink

    Pray forgive my ignorance, but was that man on the Andrew Marr show this morning the same John Major who presided over 17% interest rates?

    • Know-dice
      Posted June 6, 2016 at 6:33 am | Permalink

      And had no integrity in his personal like 👿

      Yes…

      • Know-dice
        Posted June 6, 2016 at 6:34 am | Permalink

        That should be “life” – Monday morning fingers 🙁

    • Denis Cooper
      Posted June 6, 2016 at 9:33 am | Permalink

      Yes, the same one who had a veto on treaty change but nonetheless allowed the EC to become the EU, and to start issuing its own currency which all member states present and future would be obliged to adopt and none could ever leave, apart that is from the UK where dissidents in his party, who he denigrated as “bastards”, prevented him taking us into it as well which is what he really wanted, and who rammed the Bill to approve his treachery through the Commons on a confidence vote having dismissed the idea of asking the people whether they wanted these changes to the treaty that they had directly approved in the 1975 referendum. As I’ve said before, he should not be on TV,etc ed.

  16. agricola
    Posted June 5, 2016 at 6:02 pm | Permalink

    I’m not in a position to anticipate interest levels, however I do note that the BBC are at it again in this evenings news. According to them air fares will go up if we leave the EU. Apart from this being just propaganda they gloss over the fact that the largest cheap flight operator is Ryanair and being Irish they are an EU airline.

    According to the BBC the value of the Pound will deteriorate against the Euro. If they are that clever why aren’t they seriously rich. They use this piece of speculation to sell the idea that our holidays are going to be more expensive if we leave. 27,000,000 UK people holiday in Europe PA, for Spain it is their largest industry. I do not see them wishing to commit suicide.

  17. Denis Cooper
    Posted June 5, 2016 at 6:23 pm | Permalink

    Also off-topic, I’ve just been reading the Single European Act:

    http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:11986U/TXT&from=EN

    Not only does Article 1 make it clear that this was primarily about politics:

    “The European Communities and European Political Co-operation shall have as their objective to contribute together to making concrete progress towards European unity.”

    and that economics, increasing prosperity through freeing up trade with a Single Market, was actually of secondary importance, it also appears from the Preamble that the leaders including Thatcher had somehow convinced themselves, and each other, that this was what their respective peoples wanted:

    “CONVINCED that the European idea, the results achieved in the fields of economic integration and political cooperation, and the need for new developments correspond to the wishes of the democratic peoples of Europe for whom the European Parliament, elected by universal suffrage, is an indispensable means of expression”

    But strangely none of them wanted to put that conviction to the test by actually asking their citizens if they agreed with what was being proposed.

    In Denmark, it was the opposition in parliament who managed to force a referendum; in Ireland it went to the Supreme Court when the judges narrowly ruled, by 3 – 2, that the constitution required it to be put to a referendum, while in the UK Thatcher thought that referendums were “a device of dictators and demagogues”.

  18. Edward2
    Posted June 5, 2016 at 6:43 pm | Permalink

    Peter Shore quite brilliant on TV BBC Parliament Channel on the 75 Not Out programme.
    First part of a debate back in 1975 at the Oxford Union with Jeremy Thorpe
    Wonderful stuff.

    • Jerry
      Posted June 6, 2016 at 9:58 am | Permalink

      @Edwaqrd2; Indeed, the whole evening of programmes were thus, and what a breath of fresh air too, the first intelligent set of debates in the 2016 Brexit referendum campaign – recordings from 41 years ago, says all we need to know about modern politics, someone press the “Reset” button for goodness sake! In 1975 you could count the all the sound-bites on one finger, these days you need a centipede…

  19. margaret
    Posted June 5, 2016 at 8:33 pm | Permalink

    I did support John Major at one time , but he really was bizarre this am.His predictions about the EU were wrong then, so why should we believe him now. Interest rates are down ;we better spend and take all the money out of the banks.

  20. Androcles
    Posted June 5, 2016 at 9:27 pm | Permalink

    Remain knew they were in trouble if immigration became central to the debate so Project Fear was initiated in order make it a side issue. However, rather like an antibiotic that has been used too much it is having no effect and messages of doom and destruction are getting ever more fanciful. John Major’s outbust today was an example of this – his previous attempts at warning the masses of the folly of leaving had fallen on deaf ears so he resorted to personal abuse.
    A good job Donald Trump is not running the leave campaign as he might have brought up a famous deception in John Major’s past!

  21. CHRISTOPHER HOUSTON
    Posted June 5, 2016 at 10:44 pm | Permalink

    Central Thrust of The Remain Campaign Against The Leave Campaign

    1. You have said you have been burgled of £350 million. A wicked and deceptive lie. The Burglar only robbed you of £200 million. Long Live the Burglar. We shall sleep with him and give him babies

  22. Lindsay McDougall
    Posted June 6, 2016 at 1:31 am | Permalink

    Brexit or no brexit, as a matter of policy we should want higher interest rates and lower house prices. Since we are right to be worried about the interest to be paid on state debt, we should resume deficit reduction ASAP. The combination of a muddled Chancellor and bleeding heart Tory backbenches has been disastrous. As a short term fix, to do as little damage as possible whilst not breaking manifesto promises, the Chancellor should raise fuel duty PDQ.

    • Gary
      Posted June 6, 2016 at 7:41 am | Permalink

      I agree with you Lindsay. Unfortunately, they are trapped by falling interest rates. If they back out now they kill the only thing left of the economy, houses and govt handouts. So on they march to negative rates and backing further into the corner. In or out of the EU.

  23. Lindsay McDougall
    Posted June 6, 2016 at 9:32 am | Permalink

    The BBC were at it again today. The moving strap line along the bottom of their news screen pronounced “Sterling falls on fears of Brexit”.

    How on earth do they know why sterling fell on one particular day? And if they don’t know, why do they pretend to know.

    • CHRISTOPHER HOUSTON
      Posted June 6, 2016 at 11:42 am | Permalink

      Lindsay McDougall:
      Because the BBC is an EXPERT ”
      ~~ The BBC has information vegetable, animal, and mineral,
      Knows the kings of England, and quotes the fights historical
      From Marathon to Waterloo, in order categorical;
      The BBC is very well acquainted, too, with matters mathematical,
      Understands equations, both the simple and quadratical,
      About binomial theorem it’s teeming with a lot o’ news,
      With many cheerful facts about the square of the hypotenuse.~~
      (With apologies to Gilbert and Sullivan)

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