Tuesday 10 July 2012

Interest Rates



Interest Rates 
The base rate set every month by the Bank of England are set to remain at the record lowest again! Since the end of the 2008 recession!
These record low rates are only measure for banks as a judgement of where there rates should around, the low rates are a reflection of the Banks method of helping. the economy thrive and grow from greater Consumer expenditure and Investment by firms on capital, with the increases of these components it could lead to larger growths of the economy and increase real output and GDP for the English market.
However as in Economics this may a good theory and solution for our econonmy but te are many other conflicts to this monetary policy of increasing Aggregate Demand but other policies set off by the coalition, such as reduction in large amounts of Government Spending has hit AD largely, a way they are using to decrease the budget deficit, with also greater taxes such as VAT at 20 pc.
This is the complete opposite to how the American Economy is coming out of there recession with their employment increasing and Economy growing a lot faster then the English's.

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