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(an email exchange)
> On Wed, Aug 6, 2008 at 12:25 AM, Prof. P. Arestis wrote:
> Dear Warren,
> Just received the piece below. The situation over here is getting
> worse but pretty much as expected.
> Recession signalled by key indicators of British economy
> Best wishes, Philip
Yes, seems tight fiscal has finally taken its toll and is now reversing the ugly way – falling revenues and rising transfer payments.
Without support from government deficit spending, consumer debt increases sufficient to support modest growth are unsustainable.
And with a foreign monopolist setting crude oil prices ‘inflation’ will persist until there is a large enough supply response,
It’s the BoE’s choice which to respond to, though ironically changing interest rates is for the most part ceremonial.
All the best,