Interest rates in the UK. Heading up

Mainstream economic commentators are currently anticipating an upward movement in interest rates in the UK. Many even anticipating it to occur in the immediate run up to the General Election.

However, rates paid by borrowers in the UK are already some of the highest in Europe.  And the lending rates are until very recently clearly lower. Here is my latest comparion of some key average interest rates across some of the most relevant countries in Europe.

Interest_April_14

 

 

 

 

There are links to the source data in the earlier comparisons – see below. And one can see that across Europe in these years borrowing rates have been lower in the countries compared here. And have even been falling more in the other countries since 2012.

 

 

 

This is the latest in a series of such comparisons

that we have done – begining in December 2011 when we used the comparison to call for the way in which the Bank of England set interest rates to be changed

We also did a comparison in late 2012 when we brought these issues to the attention of the Parliamentary investigation into the rigging of interest rates.

This has all been part of a stream of work concerned with challenging the power of the Bank of England, whose role in our recent UK history goes far beyond the setting of interest rates.

The advantages of a regional food supply chain, advocated in the light of the discovery of toxic phenylbutazone residues

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Michael Hart 3As a search of medical abstracts reveals advice that there should be zero tolerance of bute residues, the 2002 Look to the Local report by former MEP Caroline Lucas, LWM co-founder Colin Hines and beef farmer Michael Hart (opposite) comes to mind.

It deplores farmers turning to export meat because supermarkets buy cheaper meat from countries with low wages, and low health and environmental standards. Up to date figures were found for this ‘food swap’ which consumes air-polluting fuel for no good reason:

HMRC Market Bulletin Jan-Jun 2012

Market Bulletin – September 2012 half year trade update

clive 3 asletThe report quotes Clive Aslet,who shares this concern, and a rereading of his seminal article, ‘Clocking up food miles’,Financial Times 23/24th February 2002, reveals much of relevance.

“A public whose confidence in food has been battered by successive crises salmonella in eggs, pesticides in carrots, BSE in beef, genetic modification in cereals – has understandably erected health into a totem. While costly government action generally follows each media outcry, Parliament does not always have the foresight to limit risk in advance.

“Trade liberalisation continues. The World Trade Organisation, driven by the US, wants food to be treated as a commodity like any other. It has little truck with governments that fear health risks (it does not accept the precautionary principle), and none at all with those who raise environmental objections.

“Above all, the multiple retailers that control the food system in Britain are not likely to change their ways without pressure. More than four-fifths of British food is bought in supermarkets.

“The one straw of hope that concerned shoppers can grasp is their own purchasing power. Rightly or wrongly, consumer opinion turned so violently against genetically modified crops that the big retailers were forced to declare themselves GM-free zones.

“If the vogue for farm shops and farmers markets catches on, consumers could force supermarkets to source more food regionally, with proper labelling and promotion”.

The Hart-Hines-Lucas conclusion

Look to the local cover 2 croppedAs more consumers, farmers and workers world wide are experiencing the downside of economic globalisation in agriculture and other sectors, now is the time to consider how it can be replaced with this completely different alternative of self-reliance and localisation.

This will involve dramatically reducing world food trade and re-localising production. The goal of such a “local food-global solution” policy would be to keep production much closer to the point of consumption (and regulation) and to help protect small farmers and rebuild local economies around the world.

 

 

Will positive action by Walsall`s Regeneration, Development and Delivery department act as a `local multiplier`?

 

Walsall Council has set up a £100,000 High Street Innovation Fund to launch a new era of commercial enterprise in the town. A number of financial incentives are being put together to support start-ups and develop existing businesses. Existing small businesses looking to relocate into Walsall town centre from both inside and outside of the borough will also be supported.

Landlords with vacant units are being asked to contribute their properties to the scheme in a bid to attract new business to Walsall and boost public and private sector growth.

The Council’s Deputy Leader, Councillor Adrian Andrew, said: “We have been given a chance to create a legacy for economic well-being, providing investors, shoppers and visitors to Walsall with an attractive, busy, successful town centre.”

Optimism is rising as the number of new companies in Walsall had already increased significantly during the first six months of the year, bringing more employment and prosperity to the area, according to Companies House data, gathered and published by Duport.co.uk in their Duport Business Confidence Report. Between January and June 284 companies were formed, a huge rise compared with the 187 formations that took place during the same period in 2011.

Does the council further assist manufacturers and retailers by local procurement of goods and services?

Will the local multiplier effect come into play in Walsall? Will the increased economic activity generate yet more economic activity as money circulates within a network of local businesses?

 

Could regional banking help to develop flourishing regional economies?

Regional economic strategy is now being taken more seriously. Localise West Midland’s Andrew Lydon has been examining the collection of regional prosperity and inflation indices in this and other countries for some time and has corresponded with MPs and government departments on the subject.18 months ago the Statistics Authority told the Office of National Statistics to look at setting of regional and social inflation indices as Andrew had recommended.

In the March Budget, Chancellor George Osborne announced that Government will present evidence on the case for the introduction of regional pay structures in some civil service sectors.

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John Nightingale* recently wrote an article, Rebuilding Trust in the Regions, now published in the Good Banking Forum – which includes a range of leading figures from academia, finance, politics, the law, trade unions, consumer and civil society groups who are demanding real reform of the banking sector. GBF challenges the limited scope of the Independent Commission on Banking and hopes to mobilise public pressure for good banking.

John asked whether banks could take remedial action regionally, for example by varying the rate of interest or giving preference to certain sorts of loans. He realises – however – that it is currently difficult to get a clear picture of regional economic activity, in absolute terms or in terms of trends, because too few statistics are published on a regional basis.

He pointed out that other countries, such as the United States and Germany, have a tradition of regional economic management and commented: “In the past there was some balance through the informal supervision of the commercial banks by the Bank of England. But it seems that in 1997 supervision was handed over to the Financial Services Authority, which was more concerned to root out dishonesty and corruption than with economic performance.”

Asking if banks could take remedial action regionally, by varying the rate of interest or giving preference to certain sorts of loans, he also contemplates the advisability of a switch away from lending to purchase property and other fixed assets, into industry.

Could banks be persuaded to realise that helping to develop flourishing regional economies would be to their long-term advantage – and move in this direction?

In the ongoing discussion of banking reforms, John Nightingale urges that attention be given to the position of the regions, to ensure that:

  • views of stakeholders in regions are represented to banks there;
  • stakeholders have an opportunity to monitor bank activity;
  • known and thereby accountable representatives from the regions are included on national financial bodies;
  • more statistics are made publicly available on a regional basis so that all stakeholders can be better involved in the debate and consequent decisions.

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His article may be read in full here.


*Canon John Nightingale: chairman of the West Midlands Jubilee Debt Campaign.