Thursday, December 6
Your guess is as good
In today’s Telegraph, Boris Johnson expounds his belief that ‘if only people were encouraged to take an early interest in mathematics, they would be far more capable of making astute personal financial decisions, and thereby avoid the pitfalls of debt and penury.’ If only. Having listened to Grandad Stelzer, Ruth Lea, and the rest of the boys on Newsnight yesterday, then read Kaletsky’s conflicting advice this morning, a Cambridge first in arithmetic wouldn’t help. Kaletsky’s ‘we’re all doomed if the BoE doesn’t cut rates and take a more ‘hands on’ approach’ scenario fails to address the question of inflation - what we all thought to be the Bank’s raison d'être. That said, having listened to Mervyn King’s appearance in front of the select committee last week, I had the distinct impression (he thought) inflation would nose dive during 2008. On that basis, you’d bet on a ¼ point cut today - if for no other reason than he appears less ‘independent’ than young Eddy. Cutting the rate is unlikely to affect the Libor because the banks are in a hole for large portions of debt, and they don’t trust each other. It would be a sop to the City and Industry, as it’s unlikely to be deducted from your mortgage rate. There’s a lot of clever lads in the City with outsized abaci on their desks that follow markets as closely as my old colleagues followed the horses, and they still screw it up. Shit what do I know - a one legged painter & decorator who hasn’t taken a penny from PaddyPower in two months. At the end of the day, you take what the world throws in your direction and do whatever's required to survive. Looking back, my decision to fall from a ladder in order to avoid buying a house looks a smart move. But I wouldn’t recommend it.