Yesterday, Bank of England published the latest Interest Rate....cut 0.5% to 1%.
It reveals UK is suffering the deeply strike from RECESSION....
From the chart we can see that 1% is the lowest point ever since 1951.Interest Rate never below than 2%.But because of the recession,credit crunch,high rate of unemployment and economy crisis,UK economy become depressed...
That also affects consumers confidence.As credit crunch,people lose their confidence to borrow money,small business can`t get loan from the bank,some of them bankrupted for can`t can finance immediately....Big celebrated companies have to close a few of their multiple shops in order to reduce the fixed cost,and keep gain profit.Some of them,such as BMW,Starbucks reduce their workers to decrease the costs....
It is risky to bank to borrow money to some business firms ....
Now,the interest rate has fallen again to 1%,government want to increase consumer`s confidence,house price increase...people might gain confidence to UK economy..but not as much as before...VAT has decrease to 15% aims to want people take out the money from the bank,to expend...encourage people to buy in order to help UK economy...but now inflation is 3.3%,Which exceeded 2%.People can`t get confidence from the government policies....these policies are not really successful, people still looking on what will happen...
