The Bank of England cut rates by 25 bps this week. Their action was a response to a torrent of terrible economic data in the aftermath of the Brexit vote.
I think that for most people the promise of a marginally cheaper mortgage probably isn’t enough to get them buying a new house when they’re unsure about their job.
Similarly there doesn’t seem much point in taking out debt to buy new factory equipment — even if the debt is really, really cheap — if profits are falling and your long-term sales outlook is emphatically cloudy.
The British economy doesn’t seem like it needs more asset bubbles spurred by cheap money. It needs customers, jobs, markets to expand into (and maintain access to), quality infrastructure and a friendly regulatory environment.
Brexit is a political problem and needs political solutions. It’s time for fiscal stimulus and clear statements of future government commercial and trade policy.
The government must speak with one voice, clearly and loudly. And best of all, money is historically cheap! There’s never been a better time than now for government to borrow to fund some new infrastructure.
One could maybe start with supporting a nationwide fiber upgrade since BT doesn’t seem to be doing it. Committing to an accelerated Crossrail 2 would be nice too. We live just down the block from the station, and such a commitment would do wonders for our post-Brexit property values. Thank you in advance, Mrs. May.