Jump start
The CBI (confederation of British industry), which calls itself "The UK's leading business organisation," has called for the Bank of England to cut interest rates by a full one percent when it meets today.
The plea has been prompted by a bunch of data pointing towards the UK economy being in even worse shape than hoped in the last few weeks. Furthermore the CBI reckons inflationary pressures are receding, which would make the big cut less of a reckless move.
"We have talked to businesses of all shapes and sizes across the UK and the need for a further rate cut is clear," said CBI deputy director general John Cridland. "The recession into 2009 will be both longer and deeper than expected, and we need the strong medicine of a full percentage point cut.
"The continued paralysis in the wholesale money markets reduces the efficacy of smaller base rate cuts, so a bolder step is needed. The markets are already expecting an aggressive cut, so concerns about the impact on sterling should be limited."
The pound is up nearly two cents against the dollar currenty at 161.5 cents.
The press release goes on to apparently suggest that the government compensates for shortfalls in tax revenue and increases in benefit payments, and brings forward public spending, all without increasing public sector debt. That'll be a neat trick.
