Yes, I know it's the Guardian, but this is interesting
This was an autumn statement for the south east.
Most will realise that George is blowing bubbles
And that if unemployment falls in 2015 then interest rates will rise - tipping millions of households into crisis
Few will be fooled, I think, that this policy is sustainable, because it isn't.
I hope the poll fairly accurately reflects that.
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An hour or so ago I posted on “Hot And Cold Running Energy” which reflects your comment on sustainability. Also, it wouldn’t take much at all to bring this Osborne “plan” down in flames.
Don’t underestimate the power of the electorate to be fooled by unsustainable booms. It worked for Labour in 2001 and 2005 after all.
Sad but true Stephen. Wasn’t it Napoleon who said ” Tis a blessing to the ruler that the common man can’t think” (can’t be bothered to?)
“And that if unemployment falls in 2015 then interest rates will rise — tipping millions of households into crisis”
Forgive me for being a dummy, Richard, but why would interest rates rise if unemployment falls?
The Bank of England has said they will
Actually they have said its only one measure they are looking at. They did not say that the rates would rise automatically if unemployment hits 7%. They corrected their statement when they saw the economy was doing better than some said it would do.
True
But markets will leave no option
But if interest rates rise, treasury yields will follow. Debt interest payments will then become an issue, and the stock markets will tumble, as people rebalance portfolios in light of the increased risk-free coupon payable on gilts. Add to all of that the fact that five EU countries currently have deflation and that Europe is facing the prospect of a Japanese style future of stagnation. Try as I might, I can’t see how we get back to “normality” from here: looks to me like QE is still needed to keep the patient alive.