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Chancellor indicates support for base rate increase

Chancellor Gordon Brown yesterday indicated his support for another increase in the Bank of England base rate.

Speaking at the annual convention of the Institute of Directors at the Royal Albert Hall, Brown said the government&#39s fundamental duty was to sustain economic stability.

He says: “We will put stability first, now and in the future. We will never make the mistakes of the late-1980s and early 1990s when monetary disciplines lapsed and were forgotten.

“At this time in the economic and political cycle, past governments have allowed either inflation to get out of control, spending to get out of control or both.”

But Liberal Democrat shadow chancellor Vince Cable says: “While Mr Brown may well use his speech to indicate that he favours an MPC decision to raise interest rates, he cannot have itboth ways.

“Having made the BoE independent, which we supported as a wise decision, he cannot now tell them what to do. The BoE has a genuine problem – their mandate does not include asset bubbles and household debt. If they do use interest rates this will simply exacerbate imbalances in the economy that have led to a stagnation in manufacturing and other industries on the one hand with a runaway consumer boom on the other.”

He adds: “The chancellor and the BoE should urgently consider how to control the volume of bank lending by requiring higher reserve levels to influence balance sheets and dampen lending ability. Brown sugar and sweet words to the Institute of Directors are all well and good, but the chancellor would do well to acknowledge his responsibilities and act to resolve these issues.”


NAEA appoints Richard Hair as president

Richard Hair will take over as president of the National Association of Estate Agents on May 14 when Melfyn Williams, the Association&#39s youngest ever president, concludes his year in office. Richard Hair has been a member of the NAEA for over 25 years and is a joint senior partner of Hair and Son estate agents, […]

Shareholder fury at Abbey

Abbey was faced with furious shareholders last week after it admitted at its annual general meeting that its rebranding had cost over £11m. Shareholders at the AGM in London last Thursday expressed their anger over Abbey&#39s financial losses and said the name change was a total waste of money. One shareholder told the executives present […]

Preferred Mortgages launches two fixed deals on adverse range

Preferred Mortgages has launched two fixed rates on a range of adverse products. Customers can benefit from rates starting at 5.19% until July 1 2005 and 5.99% until July 1 2006. Other features available on the fixed rates include mortgages up to £1m, up to 90% LTV for purchases and remortgage; up to 90% LTV […]

Charcol launches two-year fixes

Charcol has launched a range of two-year fixed rate deals. The lower rate of 4.49% is available to both purchasers and remortgagers. There is also a deal specifically for remortgagers fixed at 4.69%. This product comes with a free valuation and free legals. Both deals come with early redemption charges for the first two years […]

Sub-Saharan Africa Near-Term Outlook

By Paul Caruana-Galizia, Neptune Economist

Sub-Saharan Africa’s economic renaissance continues. After growing at an average rate of five per cent over the past decade, the IMF projects an acceleration to 5.5 per cent growth among Sub-Saharan economies in the next two years, as developed economies emerge from the crisis. We expect this growth to be sustainable for three broad reasons.


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