Dads Army in Downing Street takeover shock!!!

I try and keep this blog fairly light hearted and upbeat but every now and then want to deal with some economic issues going on.

Today the Bank of England Monetary Policy Committee met to decide on interest rates. they do this every month and it's important for a number of reasons.

The main one is that the high street banks normally set their interest rates based on the Bank of England's rate. This means it affects all of us directly, well those of us that have borrowed money, owe money, have a mortgage or have savings. So I'm guessing that's pretty much all of us ;-)

You may have heard our chancellor of the exchequer say earlier in the week that we are facing the worse recession for 60 years, now for the guy in charge of the countries money to be saying that isn't very comforting. Many people are saying he shouldn't have said that. I'm gonna add my view - HE WAS CRAZY TO SAY THAT! - I think that about covers it. In my mind he should be sacked immediately for that and this is why I think that -

Recessions are in a large part based on people's confidence. When we hear nothing but gloom and doom people are scared to spend money, move house etc. This doesn't help the country because if people aren't spending money stuff isn't being sold and jobs are at risk. On a larger scale the big investors are not likely to be as willing to leave their money in a country facing it's worst recession for 60 years. So as we speak millions of British pounds are being invested in countries where the money man isn't saying doing a dads army impression and saying 'we're doomed, we're doomed'. Come to think of it maybe Capt Manwearing could do a better job in charge of the countries money!

So given the doom and gloom why haven't interest rates just been reduced so we can all have more money?

Well unfortunately it's not that straight forward. Whilst it would be good to put more money in every ones pocket so it can be put back into the economy the risk is that this will increase inflation which harm the economy. So it was a pretty hard decision to make. My view is that at this moment we would have benefited more from a reduction in interest rate and the confidence boost it would be given.

We need to hold our nerve through these times but inevitably we will get through it, economies go through cycles like this and we will come out the other side.

For tips and advice to get through these times sign up at my website or in the words of another dads army character "Don't panic, don't panic"