The Sunday Papers

The Sunday Times

Informative interview with David Blanchflower member of the Bank of Englands Monetary Policy Committee. Blanchflower has built a reputation over the last three years placing emphasis on the downside risks of the economy, how right he was. In the 31 MPC meetings he has attended he has voted for a cut in interest rates on 16 occasions and only once for a cut.

The weekly article from David Smith today focusing on the banking crisis with particular focus on the European banking sector. Could the EU be the next Japan?

The Observer

An excellent piece by Will Hutton arguing that although the economic situation is very poor the govenment is beginning to offer solutions that might just work. According to the IMF the avergae depth of a recession caused by a financial crisis is a fall in GDP of 5% over a two year period. One policy option in addition to the ones previously announced is over the coming weeks to create a bad bank.

“One option is to create a “bad bank” that warehouses the debt courtesy of the taxpayer, but the process is expensive, slow and invites questions of how the debt is to be valued. The proposed asset protection scheme is cleverer. It works more like car or house insurance; the bank accepts the first 5% or 10% of loss on the bad debt and then insures against the rest.”

Hutton argues that at last the government is putting a floor on the economy. We can only wait and see if the floor is strong enough.

Also there is a good Q & A article on how much debt Britian is in. Some stats from the article include:

The UK government had run up total debts of £697.5bn or 47.5% of GDP by the end of 2008
In 2007 our debt to GDP ratio was 30.4% (ranked 18th out of the 28 members of the OECD). Japan’s was 85.9% and Italy’s well over 100%.
Even without the banking rescue public debt has already hit 40.4% above the 40% laid out in the government’s fiscal rules.
Debt may peak at £1trn or 57.4% of GDP by 2012-13.
It is very unlikely that Britain will go “bankrupt” and have to “call in the IMF”. Ireland, turkey and Greece look much closer to the extreme.r if yo fancy

Or if you fancy a listen…

Here is the link to Gordon Brown’s interview on the Today program on Friday.

When you are listening perhaps jot down the points that you disagree with or the questions Evan should have asked. See how your points and questions tie in with this article.