Hope from Vince Cable in banking crisis
Lib Dem Shadow Chancellor Vince Cable MP has written about some of the positive benefits that should come from the current banking crisis. In an article for the Daily Mail he writes: "..in the middle of this frightening drama it is possible to see some positive developments that give us encouragement for the future.
"I earned the nickname of Dr Doom for predicting the collapse of the debt mountain and property bubble. I now see myself mutating into Mr Hope.
"Most people realise their money is safe in a High Street bank. Even if one of them collapsed, like Northern Rock or Bradford & Bingley, the Government would take over and protect all personal deposits. ... And as recession starts to bite, inflated prices will start to fall. Recent anxiety about the rising cost of living should ease, to the relief particularly of pensioners on fixed incomes.
"The scare about scarce world oil supplies has, for the moment, receded. This is true also of food prices as people tighten their belts. And, as inflation falls, it will be easier for the Government to stimulate the economy and for the Bank of England to cut interest rates.
The cloud of falling house prices also has a silver lining. Of course, families facing the prospect of negative equity are anxious. … The good news is that the next generation of young people will be more able to get on the housing ladder when mortgage lending resumes. … the Government must get involved now in encouraging housing associations and councils to acquire land or empty property to keep up the supply of affordable housing."