Tuesday, November 28, 2006
Lomax on the Great Stability
Posted by David Smith at 08:00 AM
Category: Thoughts and responses

Rachel Lomax, deputy governor of the Bank of England with responsibility for monetary policy, gave a thoughtful speech in Cardiff on the "Great Stability", whether it is under threat, and the contribution of central banks to it. Although UK inflation is above target, she doesn't believe the economy is overheating and warns that interest rate hikes for "insurance" reasons are not costless. Read the speech here.


Interest rates determine the way consumers spend their money. Where consumers pay their rightful taxes, it becomes evident that slow consumer spending means a weaker economy, and hence lower popularity for the ruling party.

It s just right that Lomax looks at higher interest with disdain.It must be that it makes imports cheaper,however the gains on importation does not necessarily pass on to the consumer, whilst pushing the currency higher and higher.

Posted by: Hitesh Damani at November 30, 2006 01:42 PM
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