I had to go straight to Reuters this morning just to feel as goddamn low as possible, in this case with some coverage of the IMF’s latest grim World Economic Outlook. The facts, as bald as we know 'em to be - ‘the world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s.’ The IMF confirm that Europe and the US are in a special pit of hell, but China and India, if looking at slower growth, will be ‘supported by solid private consumption.’ Lucky them. But we’ll be tightening our belts round this household, no bloody fear.
Still, I couldn’t quite resist checking in on Hamish McRae at the Independent, since he was offering the headline ‘Amid all the panic, there is some good news.’ And to his mind the good news can be summarised thus:
- ‘The Bank of England can and will cut interest rates, which will make things easier for borrowers and for the commercial banks themselves.’ (A prediction Gordon Brown had the pleasure of confirming as reality around lunchtime.)
- ‘the vast majority of British people will be able to go on servicing their mortgages… the home loans the banks swap for cash at the Bank of England will not involve any loss to the Bank or ultimately the taxpayer.’ (I like this faith in the Good Old Vast Majority of British people currently renting their homes from the banks...)
- 'There is virtually no theoretical limit to the amount of money a central bank can create… The big point here is that the modern state has enormous financial power. Providing confidence in its own competence is maintained it can borrow on an almost unthinkably large scale.’ (If this is good news then I'd rather get back into my little pit of hell and wait for the burning to stop. Still, confidence of all kinds is what we're after right now.)