UK Landlord Forum / Life

There's been some contradicting reports on interest rates lately. Last week I read somewhere (I can't remember where) that interest rates needed to increase again because inflation was way too high. But then I just read on The Independent that a member of the Bank of England's Monetary Policy Committee has indicated that further weakness in the economy caused by the credit crunch could lead the Bank of England to ease rates faster.

Err...yeah, what's going on?

The problem is the government taxed fuel at rates high above inflation. They did this because its probably good for the environment, but they seem to have neglected the impact of drastically increasing the cost of a raw material used across industry, distribution and retail on the economy. The inflation will continue irrespective of what they do to interest rates because its not being driven my interest rates. In the meantime the consumer will feel the squeeze because the cost of everything is going up. The only thing that will limit it is people stopping buying, and they won't like that because people like to buy and like all these new things. But that's the only end there will be to it - people going without. Then it might stop.


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