The Governors Admission of Failure

The Governor of the Bank of England gave a speech last night in which he lambasted the banks for their role in the current financial crisis.

It was a huge admission of failure - as Governor of the Bank of England he is Britain's top banker and many of the issues that he raises exist because he didn't do what he needed to do.

Interestingly one of the issues that exist at the moment, that banks are lending, is partly caused because the banks are torn between the FSA who are being extremely tight in ensuring responsible lending and the Government who want more lending. Mervyn King should be working on this and working out how we can avoid becoming a bankrupt Nation.

John Major on the Recession

When it comes to our economic problems John Major deserves to be listened to. He was Prime Minister when we last had a recession and had to guide the country though.

Today he has accused the GOvernment of "over-cooking" our current problems as a justification for the disgustingly high levels of Government debt we are facing. He also says:

"If we continue borrowing like this, the world will be coming
out of recession and we will have a huge amount of borrowing that will force up
interest rates.

"In three years' time, as the world comes out of recession, in
the United Kingdom we will have higher interest rates, we will have higher
national insurance contributions because the government have already implemented
that, and we will have higher taxes."

He is right, but as I have said before, it is likely that all this will happen at a time when demand for oil rises and, as a result, petrol and diesel prices go through the roof again - which was a large part of the higher inflation we suffered earlier this year. So higher taxes, higher petrol prices, higher inflation and higher interest rates; we may go back into recession as the rest of the world leaves it.