My head hurts

I’m still trying to make sense out of what Gordon Brown – our esteemed Prime Minister – has said about oil prices.

He’s claiming that the volatility of oil prices has jeopardised the global economy by forcing interest rates to remain high over the last few years…not any more, matey…

So, define ‘high’, Gordon?

A rather nifty chart here shows that on February 7th this year UK interest rates stood at 5.25% . Then they started to fall as the performance of the global economy started to reveal the effects of the looming subprime situation in the US.

However, for the nine years previous to February 2008, the interest rate rattled around within a fairly narrow band between 3.75% and 6.00% and no-one thought that they were particularly high during that time.

Just in case you can’t be asked to click on the link, here’s a graph showing the UK interest rates for the past 20 odd years.

Nowadays we’d love that degree of stability and welcome the higher rates (higher than they are today) as a sign that money was moving around within the economy…

In fact, you have to go back to 1992 and the preceding 8 years or so to find interest rates in double figures.

We had a mortgage then but I don’t remember much about coping with what would now be considered punitive interest rates – perhaps I’ve blotted it all from my memory…

Anyway, I digress.

So, what’s Gordon banging on about?

Has he harboured a long-felt desire for rates just above zero all these years and just never said?

Beats me.

Shame he did bugger all about it, eh?

Anyway, he then goes on to say that we need to invest more in alternative fuel technology.

Now, as I understand it, when oil prices go up the duty on fuel goes up so that the motorist may have to pay more but the government gets more revenue in the form of increased duty.

Could this bonus not have been used to fund more research into alternative energy?

Too late now though – it’s propping up the banks…

Personal financial footnote – I’ve just bought some euros for our New Year break.

I got a rate of 1.01 euros to the pound…ouch!


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