Read today’s article by Will Hutton. Mr Hutton is the author of “The State we are in” and Chief Executive of The Work Foundation.
There is nothing new in this article but it adds a bit more weight to argument about the relative economic condition of the generations.
The report he refers to by the FSA can be downloaded from here.
The picture that Mr Hutton paints is bleak (for the under-40s) but is only part of a much grimmer economic picture.
Because of their high levels of debt it makes this generation (18-40) extremely susceptible to interest rate changes. If there were to be an increase in rates of 2% it would cause real pain to the household budgets of this group – marketers take note! A rise of 5% would create chaos. Marketers take even more note!
So what is the conclusion? The UK, and much of the industrial world, is locked into needing low interest rates.
You might ask the question of what happens if (when) inflation starts to rise at an unacceptable pace (as defined by individual states). The fiscal authorities are limited/restricted to the extent they can use interest rate rises as a weapon against inflation.
So what happens - please send your answers to this puzzle to Mr Gordon Brown, c.c. EU heads of state and b.c.c George Bush.
Dick Stroud
No comments:
Post a Comment