Friday 5 December 2008

What does 2 pct base rate feel like?

Perhaps the UK economy is slipping towards Japanese style deflation but you can't fault the Bank of England for acting. After years of glacial movements in base rates, the central bank has quickly cut base rates by 2.5 percentage points. Obviously, if they fall to zero from the current level of 2 pct then we are in Japanese territory.
www.searchaccountant.co.uk
At the height of the Japanese property bubble the Emperor's palace in Tokyo had a valuation equivalent to California. Hopefully, the adjustment in British property values will not have to be so severe. The one problem is the electoral cycle here with the Gordon Brown government trying to limit the impact of the residential property decline, which is ultra important for voters.

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