UK needs to take measures to avoid second financial crisis
According to the UK’s renowned economist David Blanch flower, United Kingdom is again going to fall victim of financial crisis. In the NAPF investment conference in Edinburgh, Blanch flower, who predicted and warned about the same crisis in 2008, has again presaged the country to face a second financial crisis. This time, he presumes that the crisis is going to be far worse than the Bank of England forecasted; and Spain and Portugal earlier suffered. He urged the government to take stimulus and other quantitative measures to have the deteriorating situation under control.
Last October, while expressing his concern about the recent problems in Euro zone, he recommended the authorities to find a way to rescue a European bank name unrevealed. Although, he was scared that time also but believed that country would embark upon the situation. Although, the problem partly relates to both the financial and manufacturing sector; and the fall in sterling could have had a beneficial impact for the country, but it resulted no gain opposite to the expectation of authorities and Blanch flower.
Blanch flower served the Bank of England’s Monetary Policy Committee as member between 2006 and 2009, but he has shown discontent on its forecasting models. According to him, the UK has just a little probability to achieve the long term 6% growth target which has been predicated by the Bank of England. He warned the government not to follow the mistakes committed by US government in 1937. The US government tightened the economy and that led to another crisis. Through the conference, he just wanted to convey his serious concern over the government’s decision to spend less and provide lesser bank loans which may cause a long-term slump. Facing credit crunch in this financial crises; don’t bother apply with instant cash loans @ http://www.instantcashloansuk.co.uk/ and get the required funds in quick way and settle down the entire finance related problem.
Blanch flower further added that though, the central banks do not have another choice, but to print money to buy assets through regular quantitative easing. But he feels that it does not fairly authorize the Bank of England to continue buying sovereign debt. In a discussion with UK chancellor, George Osborne, Blanch flower reminded the government that the bank of England has options to buy private assets, buy equities and finance loans to small companies where there is no limit like the US Federal Reserve’s quantitative easing policy. He also suggested that the bank could buy even foreign assets to adjust the value of sterling. Since the Bank of England has not opted to print £10bn to invest in private assets, Blanch flower emphasized on continued quantitative easing problems could boost the value of equities and suggested to keep the interest rates lower for an even longer period.
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