so was it a case of Mr Brown being in the right place at the right time and now being hailed as one of the mose sucsessful chancellors?
That's how i have seen it, would be interesting to hear someone elses view
I was in school when the Labour government came to power, so I'm not really in a position to comment on how their performance compares to previous governments/chancellors.
However, I do believe that the world as a whole (or at least what we term the "West") has been on the up for most of the mid 90s onwards, after the boom/bust cycle of the late 80s/early 90s. Other than the mild recession of 2001-2002 (partly due to 9/11 but also other factors like over-inflated tech stocks crashing, aka "dot com") we are following much the same cycle as before.
What has concerned me is that when the government gave control of interest rates to the BoE (which I think is a good thing) they set the key target to maintain CPI inflation within 1 and 2%. Which is all well and good, but CPI is a nice little piece of spin that conveniently excludes a lot of variables from the inflation calculation. So real inflation is higher, in some cases a lot higher, than that claimed by the government.
Then suddenly when things are looking a little down, everyone looks to the BoE to lower interest rates, even though their key target -- CPI inflation -- is still above the upper limit.
Personally I think interest rates should have been raised long before they were to reduce the availability of "cheap credit", as the levels of debt people have acquired in this country is staggering. It's all well and good when the economy is growing and confidence is high, with interest rates remaining low. But when things start to turn (as they inevitably do -- history has taught us they always do) suddenly credit isn't so easy to get, interest rates rise, people find themselves struggling to pay, etc. Add into that the possibility that unemployment rises, as it usually does if the economy goes into a proper recession, and you've got a lot of people in a lot of financial trouble. Which in an over-leveraged market causes a drop in real estate values, reducing confidence (as people "feel" poorer, even if nothing else has changed) in turn reducing spending, which exacerbates the whole cycle.
I'm not an economist (as anyone who is has probably guessed
) but those are my opinions on it. I think we're due a correction, as is already happening in the US. When the rest of the western economy goes into recession it's almost inevitable that we will too, but the extent of how that affects us is dependent on things like the levels of debt we're carrying. I think GB's fiscal policy over the last 10 years has left us in a very precarious situation should things go properly pear shaped over the next 5 years or so. I hope it doesn't work out that way, but I fear it just might.
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Topic: Price of petrol up again (Read 4077 times)