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More Thought on the Economy Part X

By Andy Shaw | January 25, 2010

Originally Posted 23rd January 2009

I read the Bank of England minutes yesterday and was shocked (though I don’t know why) to see once again a vote going 8 – 1 against David Blanchflower. You’ll remember he was the ONLY one of them who got it right before they started to cut rates.

From the MPC minutes:

32 For one member, the news on the month had been more decisively to the downside and it was becoming increasingly probable that there would be a deep and prolonged recession. House prices continued to fall sharply, which would have negative effects on many self-employed who used their homes as collateral for business loans. There had been no real improvement in financial markets and conditions in labour markets were worsening quickly. The monetary transmission mechanism was impaired, which would limit the effectiveness of the various monetary and fiscal stimuli.

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Topics: Government, The Economy | Comments Off

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