Osborne unveils £140bn scheme to kick-start stagnant economy

[Murph7355]

Apache said:

I was referring to situations such as those CoopR responded to earlier

But what I think NorthernBoy is alluding to is that whilst there are no doubt *some* areas that are worth investing in and possibly cannot get funds easily at the moment, you have to assume that this isn't the case in the majority of instances and the reason banks aren't lending is because they do not want to take on the risk having been burnt recently and now having much harsher capital adequacy rules. In any circumstance like we have today, there will always be some perfectly legit examples that get caught out.

The govt cannot have it both ways. It evidently thinks it is a better judge of who should be loaned money, but its own fiscal track record (irrespective of party) suggest to me that this is bks.

[Murph7355]

Cheib said:

No what we want is effectively a not for profit bank to lend at low rates. KFW borrows money in the international capital markets and lends it to German SME's.....it borrows that money at very low rates because it is explicitly guaranteed by the German government.

The Govt would need to start it, inject some regulatory capital (peanuts in the grand scheme of things), give it a mandate and that's it.

Our politicians and out media would not be able to resist getting involved to the detriment of the overall objective. For a start, what should the "mandate" be?

It's a nice idea, but it would never work here unless there's a serious step change in many aspects of our society.

[V8A*ndy]

This is just a big con to ensure that UK PLC can continue to borrow at record low rates.

[turbobloke]

Forecasts of growth are from a crystal ball powered by increasing not decreasing total indebtedness (households, businesses and government) over the next few years. IIRC that's a view common to e.g. OBR and PwC.

[Terminator X]

RobDickinson said:

If they are printing money you dont have to pay it back, it will just go ontop of all the other everyday living expenses.

If printing then just hand it out to Joe Public, why keep giving it the banks ffs?! I'd soon spend my £5k or so which would "kick start" the economy. I refuse to borrow money at 10 or so % when the boe rate is so low & it's just been printed & handed over. This surely is why most people are just sitting tight?

TX.

[turbobloke]

Terminator X said:

RobDickinson said:

If they are printing money you dont have to pay it back, it will just go ontop of all the other everyday living expenses.

If printing then just hand it out to Joe Public, why keep giving it the banks ffs?! I'd soon spend my £5k or so which would "kick start" the economy. I refuse to borrow money at 10 or so % when the boe rate is so low & it's just been printed & handed over. This surely is why most people are just sitting tight?

TX.

Businesses are also being deterred from borrowing by overall market conditions and the unfolding EZ crisis, banks are reluctant to lend, why it's bound to work well but it needs to work or something does.

[hollydog]

Makes my laugh government want to kick start the economy by making banks richer by leaning us money to get us in more debt. Why don't they reduce the tax on fuel to get more people out spending money. Reduce tax on beer yet again get more people back into the pubs and restaurants.Reduce high street shop and unit rents to encourage new business. Reduce vat . Stop stamp duty on houses . Stamp duty on houses are unfair any way .The tax should be worked out like income tax on a scale. Its simple to me can't they see that high taxes on thing have just made things to expensive so in the end they will loose taxes because people are not buying. You need to put money back into the public's pocket to kick start the economy.
Government WE DON'T WANT TO BORROW MORE MONEY .THAT IS WHAT GOT US IN THE MESS IN THE FIRST PLACE.(Personal and the countries debt). If you can afford to spend £140bn you can afford to reduce taxes but that amount. By putting money back into the public's pocket that would give us the confidence to spend more.