Today's Daily Telegraph reports that Charles Bean of the Bank of England is urging people to stop saving and to spend more.
I would like to assure him that my wife and I intend to comply with his request during the next couple of months. We have looked at all the major household items which might need replacing during the course of the next year or so and are now busy looking at what's available with the intention of making the necessary purchases before the New Year and the impending VAT increase. We have already bought a new dishwasher (made in Germany) and have decided upon which TV we would like. Unfortunately, I can't see how these purchases will benefit the UK, as all the remaining items on our list appear to be manufactured in the Far East. Indeed the only benefit to the UK will be to those employed in road transport and the docks along with a major retailer who is never knowingly undersold.
No doubt we are not the only people doing this; it will enable the government in due course to boast that the economy did well in the last quarter of 2010, and of course they will have the ready excuse at the end of the following quarter that the downturn in the economy was due to the increase in VAT.
Of course, the Bank of England's request assumes that people have savings to spend, and begs the question of where do the banks and building societies get money to lend if no one is saving.
Oh silly me; I forgot that The Bank of England just prints some more!
Alastair Campbell New Hereditary Peer
9 minutes ago