Midlands TUC on March interest rates

Commenting on the Bank of England’s decision today (Thursday) to cut interest rates by 0.5 per cent to 0.5 per cent, TUC Regional Secretary Roger McKenzie said:

“Today’s rate cut and the start of quantitative easing are both welcome, but can only be part of the response we need to counter the recession.

“There are now diminishing returns from rate cuts. Quantitative easing will only work if it injects cash into the economy – it must not disappear into bank balance sheets like so much of the money spent so far on bailing out the banks.

“But it is Government, not the Bank, that must take the lead in fighting the recession. When the private sector stops spending, the public sector must fill the gap with the kind of state-led stimulus and investment that is taking place in the US. This will ensure a fairer and greener economy when we emerge from recession.

“Government must do what it can to speed up implementation of the many worthwhile initiatives it has announced. But many now attacking ministers for delays are those who have spent the last two decades saying that the state should stop regulating, intervening or investing. It is perhaps not surprising if Government now lacks capacity.”