The Bank of England, inflation and printing money

The Bank’s last official Statement, and the Deputy Governor Mr Bean’s recent remarks, tell us that the Bank has little idea how much quantitative easing to do, or how to assess its impact.

The Bank’s main economic view is based on the economic theory that if there is excess capacity in an economy then you will not get price rises. Businesses will bring more capacity into use as people’s income and spending rises. In competitive businesses the presence of spare capacity elsewhere should prevent any one comapny raising its prices. Because there has been such a sharp drop in output, the Bank reaons there must be plenty of spare capacity. As money is injected so more goods will be produced without inflation.

Like many economic theories, the answer to that is it all depends. The Bank should take more seriously these points:

One, if the pound starts to fall again as it did last year, we will experience substantial price rises on the many goods we import. The authorities should not be so lax that they jeopardise the currency.

Two, this severe recession will remove capacity, as well as temporarily reducing it. Today we hear that the last TV manufacturing plant in England is closing for good. Many factories are being shut down, not to re-open.

Three, quantitative easing on both sides of the Atlantic, and the huge monetary stimulus in China, is boosting commodity prices. This will exert some upward price pressure on finished goods.

Four, because many companies cannot get more bank credit they are taking a tough line on price levels despite falling output. Some may continue to do so in the upturn.

There is a bigger worry. Both the Bank of England and the Fed ignored price bubbles in assets in the long boom prior to the 2007-8 collapse. The Bank of England seemed to take the view that high and rising house, property and share prices were not in themselves inflationary or a worry, yet they were fuelling the boom which in due course led to faster overall price increases. It seems that both the Bank and the Fed want to create another asset price bubble,and are beginning to do so. They should learn from the past. Asset bubbles in the end have to be deflated. They can also be inflationary.

At least the Bank now accepts that printing more money will not necessarily create more credit, the original aim of the policy. They need to persuade the FSA to change its bank regulations if they want more credit. It would also help if the government didn’t want to pre-empt all the money for its own borrowing.


  1. Stewart Knight
    August 27, 2009

    In a discussion yesterday, we thought much the same as you. We also thought that because the housing market is showing signs of a minuscule recovery, people are starting to buy again. Taken along with printing money, a la Mugabe, there is bound to be inflation rises.

    So the discussion centred around interest rate rises. We need interest rate rises now to stimulate the money markets and encourage savers, not just the credit markets. We need interest rate rises to curb the inflation we are going to see soon.

    So the question should be can Brown avoid interest rate rises until after an election, thereby blaming the Tories, or will it come sooner?

    This hasn’t really been a recession for the public…yet. This has been a credit crunch and business based recession. When rates rise and we see mass repossessions, then we will see the real recession. Lets keep our fingers crossed, but is that really the way to run a country?

    1. james harries
      August 27, 2009

      I would have loved to be in on your discussion, sadly I’m in France.
      Perhaps I could have exulted in finding the distinguished professor of All Souls wrong in every particular. (A rare event.) (I am not a Professor but a fellow of All Souls Oxford-ed)
      1. Wage efficiency theory holes para 1 -3 below the waterline.
      2.Devaluation has a positive effect (ok, delayed).
      3. Monetary efforts (on the 4% of GDP that is actually money) have no effects on commodity prices. They may have effects on inflation, but only demand can change commodity prices. (OK, speculation may have outrun trade…)
      4. Companies anxious to shift stock maintain price levels (para 10)
      5. Asset bubbles are a bad thing. Well… er … yes of course when banks go bust and people lose their homes it’s terribly sad. (No more bonus, boo hoo!). But according to De Soto 90% of 3rd world lending is sub prime… so if we get 10% of that lending creating 20 3rd world billionaires, that to me would be a GOOD THING.
      6. “Asset bubbles can be inflationary”. Is there no limit to the statement of the bleedin’ obvious? It’s inflation, Dr (Redwood-ed), but not as we know it, by CPI/RüI/M3. But asset bubbles have a purpose. A fool and his money are easily parted, and that’s how we get the money to those who can put it to use.
      7. make up your policy as you go along. The conservatives (see JR recent blog) have no policy and no debate on the future of the third biggest employer in the world, paid for by the british taxpayer.

      Reply: What a muddle! Our devaluation last year has not resulted in as good an impact on foreign trade in Q2 this year as France has enjoyed with a strong Euro. Commodity prices have shot up from the lows as a result of stockpiling and speculative demand. The Conservatives do have a policy on the economy – which starts with tackling the massive deficit before it engulfs us all.

      1. no one
        August 28, 2009


        re “The conservatives (see JR recent blog) have no policy and no debate on the future of the third biggest employer in the world” he meant the NHS, althought there is a rumour Walmart is bigger, so what with Indian railways and the other one (i forget?) makes the NHS 4th biggest employer in the world?

        anyways thats what he meant

        Hope that helps

        Reply: yes, understood. They do have a policy on the Health Service – more money allied to reform, end to top down targets, more patient choice, patient control of records etc

        1. james harries
          August 28, 2009

          I quote from JR’s blog of 22/8/09:
          “There is no row, debate or discussion going on amongst Tory MPs on the issue of health reform.”
          What are we to conclude from this statement?

  2. no one
    August 27, 2009

    I’m still interested in the top level plan of what our economy is supposed to excel at to pay its way in the world?

    Its clearly not manufacturing?

    Its clearly not low level jobs that can be offshored to a cheaper nation with no health and safety or employment rules

    Its clearly not senior level grad level jobs as we are allowing tens of thousands of Indian nationals into the country on Inter Company transfer visas?

    So we are just going to be a tourist economy?

    Or what exactlly do we think we are going to do to earn out bread?

    1. Phil C
      August 27, 2009

      It seems to me that the only possible economic activity for an affluent country is personal and local services, since these are delivered in situ; plus very high skilled cutting edge technologies. Everything else can be off-shored or made cheaper by foreigners.

      Fortunately we are, as David Cameron recently pointed out, an ageing population needing ever more health and social care, and we have the medical/scientific sector ever more willing to find ways of keeping us alive and well.

      What he did not really grasp was that as well as real terms growth in the NHS being required to cope with these factors, if it continues to be entirely tax funded it will eventually exceed the taxpayers’ tolerance.

      The solution can only be to encourage people to top up their healthcare, pensions and social care provision, not by taking out medical etc insurance, but by making NHS cover available from competitive providers who would be allowed to charge flat rate (to prevent them ‘cherry picking’) subscriptions, like health clubs. This would require Treasury funds to be portable between providers and tax allowances for the top-ups.

      How then will we be able to afford or indeed pay for foreign imports if we are paying out more for our family’s and future health and social care?

      Well, that I am afraid is the point. We won’t have either sufficient disposable income left over, or the foreign currency, to maintain our current lifestyle of imported goods and foreign holidays. But then we will be better cared for, and by our own people!

      1. no one
        August 27, 2009

        re “very high skilled cutting edge technologies” is often being offshored to nations with little health and safety, employment regulation, etc, often by the large Indian Outsourcing Outfits

        BUT we also have many tens of thousands of folk from India here on inter company transfer visas working on “very high skilled cutting edge technologies” projects!

        These Visas were originally designed to allow senior execs of multi-nationals to come here on a short-term basis, and allow the efficient running of multi-nationals.The leading Indian outsourcers Cognizant, Satyam, Tech Mahindra, Tata etc etc have tens and tens of thousands of staff here on these Visas.The staff are not in much of a real sense working for the company which brought them in, rather they are immediately subcontracted (for less than a European could possibly afford to work for) into our public sector and large companies.India is sucking up some of our key skills, and forcing our own workforce out of work.I should add that such folk after a few years here are eligible to apply for indefinite leave to remain and there we have it totally uncontrolled immigration. Also worth noting that they can bring their family in, partners and children who are also entitled from day one of entry access to the NHS and our education system. Some very seriously ill people coming into the country via this route and draining our health resources. To say nothing of those bring a few kids in and taking places at schools that just could never have planned for such unplanned extra heads to educate.A junior member of staff brought in this way often costs us more in health and education resources than they are contributing.So once they get indefinite leave to remain they are finally able to leave the company which brought them in, and seek work with other UK employers helping force down wages for Europeans. Up until that point they are treated very badly like modern days slaves, indentured servitude I think is the phrases. Employment laws and immigration rules are broken daily by companies such as Cognizant, Satyam, Tech Mahindra, Tata etc etc and yet no government agency is prepared to bring them to book.Now the outsourcing and offshoring business has already moved countless tens of thousands of our most highly skilled jobs to India, and similar countries. And the last few years we have compounded this by allowing totally unrestricted inward movement of Indian nationals on inter company transfer visas.This cannot continue. The country cannot sustain this.Normal market forces are totally broken, and the UK really needs to think long and hard about how it is going to compete with countries which disregard health and safety and the norms of good employment practise, anti pollution rules etc.We should be educating and training our own people, and market forces without this influx would have forced employers to spend more on training our own workforce.Sadly I expect real serious problems for us ahead if we allow this to continue.If we are going to continue to allow this we may as well allow all Indian national free work visas, why should we allow the Cognizants to make money simply by providing a mechanism for these folk to get Visas?The USA is starting to turn back a similar tide over there, forcing a lot of this work to Canada BUT it is forcing some sense back into those sectors of their workforce. We need proper managed migration a situation where so many of our own highly qualified folk are unemployed in the recession and we are still allowing thousands of Indian nationals into the country to work cannot be sensible.The government on this as many other issues has lost the plot, victim of lobbying from the big industrialists who like having over supply of workers forcing wages down.We should not be supporting this for the reasons of poor employment practises suffered by the Indians brought in as much as anything, we wouldnt support the slave trade, and this is often little different.

        Look BT has stopped pretending it is hiring UK grads or indeed experienced staff, its just hires them in India via Tech Mahindra and brings them in via inter company transfer Visas. And BT are far from being the only large organisation doing this.

        We cannot compete like this. We are actually training up our main potential competitors – who are prepared to mercilessly compete against us by undercutting the costs of our employment and health and safety practises.

        “personal and local services” will not allow us to pay our way in the international trading nations, and neither will an ever larger public sector (even if it does outsource so much to Indian nationals too on the misguided belief it is cheaper)

        So whats the answer?

        do let me know

        1. no one
          August 27, 2009

          BP have today just signed contracts for 1.5 billion quids worth of IT projects split between

          IBM, Accenture, TCS(Indian outsourcers), Infosys(Indian outsourcers), Wipro(Indian outsourcers)

          When you realise that IBM and Accenture will be using significant Indian resources as part of their chunks you can see how much of the high tech leading edge work has been given to India

          This from one of our biggest British companies

          Where exactly is the British high tech workforce going ? Not to work thats for sure

          1. Mark Parker
            August 28, 2009

            This is an interesting dilemma of our times. Trade agreements can stop 3rd world farmers competing with our farmers, 3rd world manufacturers competing with our industry, but nothing at the moment stops software from flying around the world untouched by regulation – and software development is a big deal these days.

            I imagine John Redword is a “free trader” to the core, but personally I think free trade between disparate nations is a bad idea. It causes a general lowering of quality standards and incomes equalise between the nations to the disadvantage of the richer – which is usually us. Free trade with Western Europe or North America is fine by me, but not with India or China. Why should we give away our standard of living for their benefit?

          2. chris southern
            August 29, 2009

            Free trade isn’t the problem, it’s the taxes that cause the problems.
            Higher taxes mean less competetive business within the global market, higher (and more) taxes means higher cost of living thus making workers less competetive in the global market due to the increased salaries they need.

            Cutting beuracracy as well as the amount of taxes whilst finding ways of reducing the goverments debt (unfortunately it’s the people who have to pay it!) without increasing any taxes is the key to resolving the problem and pushing the economy forwards in the global enviroment (the world is too small for protectionism to work any more) and that is not going to be an easy task for anybody.

    2. Adrian Peirson
      August 27, 2009

      If I were a cynic I woudl say that we are being deliberately destroyed.

      1. no one
        August 28, 2009

        free trade is OK within certain bounds

        one bound being countries obey some basic human rights, employment rights, health and safety, anti pollution and other similar goalposts are set, if not then free trade needs to be controlled for the benefit of all of these things

        there is a difference between trading things and allowing massive uncontrolled influx of Indian nationals on high tech projects into this country on inter company transfer visas, the UK/Eurpropean workforce cannot compete with such people for a whole bunch of reasons

        1. Adrian Peirson
          August 28, 2009

          It does seem hypocritical of Westminster, to sign we the British people to all sorts of international health and safefty legislation, hampering our Industries with expensive Quangocracy legistalation then give our Jobs away to foreign sweat shops where no such requirements exist, again call me cynical but…..
          If I were in the forces, I wouldn’t want this Govt watching my back.

  3. Mark
    August 27, 2009

    Alice Cook has once again had some relevant posts: this one

    makes the point that credit to industry is contracting while lending to households increases. That may stave off a few repossessions ahead of an election, and even temporarily re-ignite Brown housing Ponzi scheme, but households need to earn an income to pay down debt. As unemployment rises, so household incomes contract. The policy seems designed to offer a sweetner prior to the election and the very better pills that will have to be swallowed thereafter.

  4. Mick Anderson
    August 27, 2009

    This Government assumes that everything is there for their own benefit, especially money and the banks.

    Everything they put in place is to help them with their grand schemes of social engineering. They ignore any side effects that might impact on anyone outside of their own cosy little club – it doesn’t matter to them.

    So, the only reason for them to have printed money was to give them something extra to spend. It was never about helping the countries economy, only about boosting their own introverted one.

  5. Neil Craig
    August 27, 2009

    There is always excess capacity in some industries & a shortage in others. Currently there is a (world & British) excess in car manufacturing & apparently windmills as well, while there is a severe shortage in nuclear reactors. Printing enough money to ensure everybody can have 2 cars will merely mask the message that we need some way of keeping the lights on.

    1. Robert
      August 27, 2009

      Windmills are in demand – caertainly the gearboxes for the beasts are – waiting list of a year or two I am relably informed! Vestas wanted to get out of a high cost fabrication site I guess?

      1. Lola
        August 27, 2009

        I bet the gearboxes have the longest lead time of any of the components.

        1. Robert
          August 28, 2009

          Correct being the most complicated key component, with Siemens being by far the number 1 in this field.

  6. Adam-
    August 27, 2009

    How do we know that QE is actually doing anything? How do we know it’s not just funding a flight of capital from the UK? The drop in Sterling suggests this might just be happening.

    How do we know the sellers aren’t just taking profits while some idiot (the BoE) is paying over-the-odds for them, then stuffing the cash under the mattress until yields improve?

    Why don’t they buy other securities, to prove to the market they’re not just funding the deficit with printed cash?

    Why can’t they deposit the newly printed money into the existing banks, where they can be lent out directly? Why not even create some fresh new banks?

    And how can we get these ideas over to the BoE?

    1. Stuart Fairney
      August 27, 2009

      You can’t, you just don’t have to hold Sterling! I speak as someone who wiped out my student debt in a day on (so called) Black Wednesday when I maxed all my VISA cards and bought Euros.

    2. StevenL
      August 28, 2009

      I’m sure they’ve come across such ideas. The prevailing wisdom, however, is that if you want to reduce interest rates, and in this instance keep them reduced, you buy government paper from banks with newly minted money.

      As for what is happening to this money, it seems to be inflating the prices of liquid assets and sustaining goverment borrowing .

  7. Acorn
    August 27, 2009

    As my computer has suffered a dose of colic, major deleveraging is being carried out to cover an undisclosed toxic asset in the bowels of its memory.

    As a consequence, I came across this tagged piece. Notice it is dated April 2006. Those were the days, money for nothing …:- (don’t worry, no bugs in this link)

  8. Waramess
    August 27, 2009

    The concept of QE is subscribed to only by the statists who believe as recession is the product of a shrinking monetary supply it can be countered by an increase in the supply of money.

    I believe it is not subscribed to by the Adam Smith Institute nor by the Mises Institute both of whom are against the concept of QE.

    To those who are not statists the economy is very diverse and cannot be viewed as an object to be inflated and deflated at will.

    Right now unfortunately the statists have power and to ask them to abandon their beliefs is about the same as asking them to relinquish power.

    So I guess for the time being they will have their way and we must wait, remembering clearly those whose failed economics broke our system.

    1. StevenL
      August 28, 2009

      I stick by my theory of a few months ago, in that by allowing deposit taking (real) banks and investment (casino) banks to merge the economy has split into a real economy and a casino economy.

      QE money is just sloshing around in the casino while productive businesses struggle for finance.

  9. oldrightie
    August 27, 2009

    Not only is unemployment rocketing but credit card debt remains a heavy burden round the necks of millions of consumers. All the printing of money in the world will not reduce that debt and the holy grail of Labours’ economic obsession (consumerism) will not be found ever again.

    1. Adrian Peirson
      August 27, 2009

      Credit is simply thin air, ask them to show you what they lost.

    2. Stuart Fairney
      August 27, 2009

      In fact, it might. Serious inflation will make current debts trivial (if held in Sterling) and Sterling itself worthless. As a reminder of various governments recklessness, I have framed, various now obselete and worthless fiat currencies. It’s a good reminder that modern money is paper based on trust ~ nothing more. Once the trust is gone, so is the value.

      Anyone want to be a millionaire? I have a hundred million Zimbabwe dollar note.

  10. Tony
    August 27, 2009

    John: Haven’t you heard that the recession is over? Yes, we might be saddled with debt but the Government’s stimulus package and the Bank of England’s actions have helped us pull through. The worst is over; cheer up.

  11. Mark Parker
    August 27, 2009

    Imagine how diffcult it would be for the government to raise the £175bn it’s borrowing this year if they hadn’t injected the £150bn QE money into the bond market!

    The only legitimate way out of this economic mess is extreme austerity in both the public and private sectors. Debt must be repaid; the savings ratio should be stoked up. A significant rise in interest rates is called for. We need a base rate of 5% or more – not 0.5%.

    Basically the profligacy of the last decade needs to be countered by equal and opposite pain now. The longer this doesn’t happen the worse the eventual “cure” will be.

    1. Robert
      August 27, 2009

      Quite agree!

    2. Adam-
      August 27, 2009

      I fear the UK economy is stuck between a rock and a hard place, having to choose between cutting spending and maintaining it, a deflationary depression or stagflation. Ultimately the latter does less damage so that’s the policy being persued with QE. That said, neither is going to be fun for Sterling asset holders.

    3. Adrian Peirson
      August 27, 2009

      I heard that Us emabassies around the world have been told to dump their holding of dollars and buy local currency, oh and they were told to stay away from Sterling too.

    4. Iain
      August 27, 2009

      Yes I am beginning to wonder if the Bank of England is more concerned about ‘covering ‘ the Gilt auction with their QE, neutralising the mountain of debt the Government is having to borrow, than they are about stimulating the economy.

    5. StevenL
      August 28, 2009

      “extreme austerity” implies more economic inactivity. If people aren’t spending (and I must admit I’ve been eating a lot of tinned ‘camping food’ recently and stuffing cash into funds) what viable businesses are there going to be for the banks to lend all of the extra savings to during a massive slump in consumer spending?

      The last thing we want is another situation where there is so much excess money to lend that they lend it to any Tom, Dick or Harry against any house at any valuation surely?

  12. Demetrius
    August 27, 2009

    The ghosts at the feast are those who are losing money in real terms, whose incomes are permanently reduced, whose costs have gone up sharply, and those with serious difficulties in reducing their debt levels. As this is the great majority of the population, it might be possible to push the figures in the short term, but it means heading for worse trouble not too far into the future.

  13. RobertD
    August 27, 2009

    The issue is that the pain of the recession is not evenly spread. It is concentrated in people made redundant from manufacturing, construction and service industries supplying the private sector, new school and university leavers, small business owners, and those newly or approaching retirement who have had their pension funds trashed.

    Those in stable employment with regular pay reviews and state funded final pay pension schemes have been having a ball with lower interest on their mortgages and all manner of cheap deals on consumer goods and services.

    QE is keeping the fortunate people in comfort by allowing the governement to fund its debt and the banks to repair their balance sheets. It is doing nothing to stop the destruction of productive capacity in the wider economy, particularly the part that produces internationally tradeable goods and services that will be needed to fund repayment of the vast sums of international money that the government will have to borrow once the printing presses stop rolling.

    In effect the government is deferring most of the adjustments that the economy will have to make, so that when they finally can’t be avoided any more (new government with Mr Redwood wielding an axe, or the arrival of the IMF) then the pain will be so much worse.

    We have to recreate an enterprise culture with manufacturing and services that can compete internationally using all the talents currently squeezed to the sidelines. To make this possible the administrative proceses of the public sector will have to be demolished and rebuilt from the ground up on a lean and essential basis only.

    QE is the Kool Aid that tries to hide this reality.

    1. StevenL
      August 28, 2009

      I think we need less prevaricating and ‘consultation’ and more leadership and direction. I would much rather see any increased borrowing spent on energy infrastructure like the Severn Barrage, new motorways and roughshot ridden over the bird-lovers etc that oppose progress.

  14. Phil C
    August 27, 2009

    It was indeed clear at the time that house price rises were inflationary, fuelled by excess money supply rather than simply reflecting supply and demand for housing. And having interest rate policy then being decided on the basis of inflation indices which excluded house prices, yet included imports which were in currencies fixed at low exchange rates, it is no surprise that the policy was all wrong for sterling.

    Getting the economy moving again will not be achieved by reinflating the bubble because banks will not lend the extra cash, averse as they now are to more bad debts. Confidence that house prices will not drop and that mortgagors and businesses will not default are the key to that. Better that responsible lenders attract funds by paying good interest rates, and that reliable borrowers do not exceed their ability to pay. And if this means further price falls and business failures then so be it. A feel good factor is only something that politicians need to get themselves re-elected. The rest of us get on without it.

  15. Mike Stallard
    August 27, 2009

    It seems to me – an armchair economist – that the way to get manufacture going in this country is to reduce the taxes fast, take off all the paperwork, cut the number of silly rules, and let the entrepreneurs get on with it. Then be ready with the knighthoods….

    Money can be provided by making the banks admit their dirty little secret stash of unredeemable money and set about eliminating it.

    Meanwhile, removing most of the top heavy state, with all its waste and incontinent spending would, no doubt, remove the debt. And removing the war in Afghanistan would help too.

    Is it worse to be the third generation on the dole or a Chinese type semi slave worker? Discuss.

  16. Lola
    August 27, 2009

    On topic sort of, but do you know what? I am epically tired of all this. The world knows that Labour have messed up big time. The world knows that QE will come to haunt us. The World knows that the banking cartel needs breaking up. The world knows that we need a government capable of genuine reform and committed to genuine economic and fiscal prudency. None of this is going to happen until Labour goes. So all we are doing is banging on and on about all this and every day that goes by another few billion is squandered on a desperate throw to save Gordon Brown’s reputation (fat chance).

    By now, in business, and in a genuine democracy this shower would be gone and we’d be getting on with sorting out the epic mess they’ve made.

    The key question is, how can we force Labour to the polls in short order?

  17. Brian Tomkinson
    August 27, 2009

    We were told that QE, or printing money as it should properly be called, was to stave off deflation. We are also told that we are experiencing deflation because the RPI is -1.4%. This is a false figure which when the mortgage element which applies anyway to only a minority of mortgage holders shows that prices are still rising. This is confirmed by the CPI figure currently at 1.8%. Food and energy prices are way up on last year. All the created money seems to have been used to bolster government borrowing. The whole idea looks to me like a disgraceful confidence trick perpetrated against the British people. This government has mortgaged the future prosperity with its gigantic debt and together with the Bank of England they are monetising this debt.
    They want high inflation. There is insufficient scrutiny of what is being done and the government is acting like a tin pot dictatorship.

    1. Lola
      August 28, 2009

      RPI doesn’t measure inflation of deflation. What it measures is the trend of the general price level. Inflation is the destruction of the value of money by way of its oversupply and/or reduction in quality. Deflation is the reverse. When you’ve had a massive inflation, as we have had under G Brown’s useless stewardship we need defaltion to sort out the mess. Money in effect has to be destroyed. Letting the banks go bust would’ve been a good start.

      What we have now with QE is hyper inflation. Sooner or later this will be reflected in the general price level.

  18. Chuck Unsworth
    August 27, 2009

    Yep, we’re deeply into uncharted territory with no compass, no sextant, not even a watch – and the water is running out.

  19. Caledonian Jim
    August 27, 2009

    Looks like QE is just another way of shoring up bank balance sheets rather than injecting cash into the economy.

    And the REAL interest rates being charged by financial institutions, as opposed to the base rate, are so high as to be effectively negating some of the MPC’s policies. If high rates discourage inflation, the greed of these banks and building societies is already working on that.

  20. Andrew Gately
    August 28, 2009

    Quantative easing is not about getting the banks to lend.

    RBS have stated there target is to get the lending to deposits rate to 100% down from 150%.

    In other words the extra monies being deposited at banks as a result of quantative easing are being kept by the banks who have no intention of lending them.

    This isn’t a bad thing as the only other option for the banks is calling in existing loans.

    It’s just a shame they can’t tell the truth on the matter but I suppose with irresponsible so called experts like Vince Cable ready to twist the truth can you blame them.

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