Mar
11
11/03/2009
Today the Bank of England releases the first tranch of cash into the economy under its new policy called quantitative easing, whereby it is buying up government assets and debts so that it can inject more money into the economy.
The Bank plans to raise an additional £75 billion of new money this way over the next few months. Although today is only the start of that massive cashflow relief, it has been hailed as a kick start to the British economy in a time of recession. We have been promised several ‘kick starts’ before but in all honesty most of them seem more like a gentle nudge than a kick; the VAT rate reduction springs to mind as one example.
The theory behind quantitative easing is that as cash starts to flow back into the economy it will stimulate business and spending, thereby helping the country climb out of recession. The raft of interest rate cuts by the Bank of England have done little to stimulate growth or improve confidence within business, as reflected by the Federation of Small Businesses (FSB), who recently said that most of its members didn’t want to see Bank rates cut to the half of one per cent announced last week, and most felt improved access to capital would be of greater benefit.
It is only through increased help to businesses that all of us will see light at the end of the tunnel. Whilst businesses lack confidence they fail to grow; failure to grow means stagnation, which in turn means loss of market share and poorer profits. All that adds up to one thing for the man and woman in the street – redundancy and unemployment. Therefore businesses are a key focus of the government, and rightly so.
We must all hope that the latest fiscal policy turns out to be a success but it is likely that it will take until at least the end of this year before the recessionary tide starts to turn. For some, that will be too late. If you are facing redundancy, a long period of unemployment, or have had to take a pay cut in order to keep your job, you will be concerned about more imminent problems such as how to pay your mortgage.
Meeting household expenditure at a time like this can be very difficult. Many people have had to economise but the few that are already at breaking point are finding their difficulties cannot be overcome by measures as simple as buying less expensive groceries or cutting down on the entertainment budget. For these people more drastic action is required.
If you are facing the possibility of losing your home because you cannot pay the mortgage contact Property Rescue to find out about their guaranteed offer to buy your home and their ‘buy and rent back’ option, which allows you to sell your home to Property Rescue but stay in it as a tenant. Both these schemes will prevent repossession and all that entails. Phone for more details and an informal, friendly chat with one of the experts on Property Rescue’s team.