MPC ANNOUNCEMENT UNDERLINES CREDIT MARKETS STILL NOT MOVING.

MPC ANNOUNCEMENT UNDERLINES CREDIT MARKETS STILL NOT MOVING.

“HIGH PRICE OF LOANS CRIPPLING BUSINESS”.

Commenting on the announcement that the Bank of England’s Monetary Policy Committee (MPC) is to keep interest rates at a historically low 0.5% and continue with a £75bn programme of quantitative easing, SNP Treasury spokesperson Stewart Hosie MP said:

“Alistair Darling’s attempts to jumpstart the economy are not working, and indeed he admitted that recovery is likely to take much longer than he predicted in November.

“The real difficulty is the cost of borrowing. Every day, I hear reports of loans being offered at well above LIBOR. This is crippling business.

“Last month, the MPC approved a radical programme of quantitative easing but this is yet to have the desired effect of getting credit markets moving.

“I have long held reservations about the effectiveness of printing money. While it is early days, the Japanese experience in the 1990s – where bank lending actually decreased – offers little encouragement.

“One thing we do know is that the UK Parliament was denied the opportunity to formally debate whether this tactic would work before it was introduced.”