Slightly Worse Than We Thought, I'm Afraid

THURSDAY, NOVEMBER 06, 2008

Slightly Worse Than We Thought, I'm Afraid

The Governor addressing the Monetary Policy Committee

For the last several years, Tyler has had a touch of the jolly old Big C. Nothing to worry about at all, smiles the consultant. Hardly anything, in fact. Althooooughhh... just to be on the safe side, maybe we should amputate your body.

So having hemmed and hawwed for months, just why has the Bank of England suddenly decided to slash interest rates by 1.5% in one shot? What aren't they telling us? What is the truth? Give it to me straight, Doc. I can take it... maybe.

Part of the truth is that the economic outlook has tanked since last month. As today's IMF pronouncements underline, GDP is heading down, down, down.

But also, this cut is the Bank confessing it's been totally wrong-footed and really doesn't have the faintest idea where we're now headed. Worse, inflation isn'tgoing away, so, er... sell everything. The equity market has duly obliged, with a straight 5% fall.

Tyler had lunch with an old City colleague today. Naturally, said colleague was covered in powder burns and his arm was hanging off, but he did bring somewords of encouragement from the ruined Temples of Mammon. Because nobody any longer wants to hold anything that might have the slightest whiff of toxicity, there are some fantastic bargains to be had. £1 going for 10p.

All you need is cash.

And very very strong nerves.

PS Will the BBC ever take the financial markets seriously? Guido keeps a close eye on Newsnight's ludicrously ill-informed Trotskyite coverage, but R4 PM is even worse. Every night, Eddie "You can't help laughing. Not" Mair and his straight man Nils Blythe amuse themselves by doing the markets as an audition for the sixth form music hall evening. Yes, yes, I realise BOM isn't a whole lot better. But BOM isn't a tax-funded "public service".