UK INTEREST RATE CUT AND MONEY PRINTING NEWS.

UK INTEREST RATE CUT AND MONEY PRINTING NEWS.

‘CHANCELLOR MUST CONSIDER SERIOUS IMPLICATIONS’.

Commenting on the announcement today (Thursday) of a further 0.5% cut in interest rates by the Bank of England's Monetary Policy Committee, SNP Treasury Spokesman Stewart Hosie MP said:

“As we head into a recession, any action to make it as short and shallow as possible is welcome, but the scale of this and recent cuts shows how critical the situation has become and confirms that the banks are not yet lending again to businesses and individuals.

“The UK Government must take further measures to ensure money starts flowing. In addition to this cut they must review the 12.5 % dividend they are expecting from the recapitalised banks.”

In response to reports the Chancellor is considering printing more money to help boost the economy, Mr Hosie added:

“I would urge the Chancellor to think carefully about the very serious implications this move. What Treasury officials will describe as quantitative easing will conjure up images of wheelbarrows full of worthless cash for everyone else – and risks future inflation and a further serious weakening of sterling.

“In addition to monetary policy, the economy needs a fiscal stimulus. Analysis produced by the Scottish Government suggests that a programme of capital investment of equal value would have safeguarded twice as many jobs as the recent VAT cut.

“If the UK Government was really committed to supporting the Scottish economy, they would scrap their planned £1 billion cut to Scotland's budget in 2010 and 2011 which pose a major threat to jobs and services in Scotland.”