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Tuesday, August 05, 2003

Austria in London

THe Guardian's Heather Stewart sounds almost Austrian when she writes about the Bank of England's recent performance:

Consumers can hardly be blamed for their live now pay later approach - they've been coaxed into it by an activist Bank of England keen to keep the economy afloat. When the dotcom bubble burst, central bankers understandably hoped to inflate consumer demand by slashing interest rates in a deliberate attempt to offset the downturn in the corporate sector.

and again:

Economists are busy arguing about when and how fast, not whether, consumers are going to have to change their ways. Vicky Redwood of Capital Economics calculates that it would take four years of zero or negative consumer spending growth - or six years of sluggish growth - to get debt back to a more sustainable 105% of disposable income, which is closer to the long-term average.

What's odd about this is the source. The Guardian is arguing against activist monetary policy?