More Boom And Bust Down The Line

Figure released by the government have shown a dramatic drop in the unemployment figures prompting many market commentators to suggest that interest rates may go up sooner rather than later. The Bank Of England has said that interest rates would nt increase until unemployment levels reached 7%.

The recent figures suggest that this figure would be breached sooner than the Bank had previously thought and that it may be forced to increase interest rates sooner than it would like to. Many market watchers have always said that it could not see how the bank could keep rates at 0.5% as they could foresee the employment figures improving .

The bank has left itself in a difficult position because it does not want to increase interest rates befor the economy has has a chance to fully recover from the worst recession for nearly 100 years. They may not have much choice though particularly if there is a housing bubble that needs to be brough under control. If history teaches us anything there will almost certainly be another boom and another bust and there is nothing that we can do about it.