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Monday, October 20, 2008

Tax and Spend

Old style Labour is rearing its ugly head in terms of its fiscal "management".

Figures from the Office of National Statistics (ONS) show that net debt (£645.3BN), expressed as a percentage of GDP had risen to 43.3% at the end of September, up from 36.2% a year ago.

This rise in public spending, which of course will have to be financed by tax rises, will not save the country from recession nor indeed provide much of a soft landing.

The key to "managing" the recession is that of cutting interest rates, not just in the UK but in the other major economies of the world.

Lamentably, the Bank of England has been remarkably slow to grasp that point so far.

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