Well its probably best to take a look at America PLC, when they sneeze the world catches a cold soon after.

I can only think that as drops in interest rates are not being passed on, the monetary policy commitee (MPC) may well have decided that until the Banks and Building Societies comit to lowering their mortgage rates in line with the base rate, then theres no point in dropping. After all the Bank of England would only be fattening the margins of the Banks at the end of the day.

But they do seem to be have missed a very big window of opportunity to improve sentiment and create a less dark outlook. When firms look at their plans for 2008, they best assess how good or bad the economy is going to be, do they invest or do they cut back? well sentiment is negative, and any hope of improving it went out of the window when the rates failed to drop last week.

I estimate that tens of thousands of jobs went on Friday, the financial services industry being one of the hardest hit sectors along with retail.

We had the leading US banking giants Goldman Sachs and Merrill Lynch confirm that the Big “R” is on the cards in the USA, now Trumpo has avoided any intimation that the UK may be heading into recession at all costs, but we cant now ignore the signs.

Goldman Sachs chief economist says that unemployment is the main trigger and that the percentage levels of recent rises in unemployment now in the US has typically started a recession immediately and almost always within three months.

Merrill Lynch’s financial gurus also confirm in a recent report that at not time in the last 60 years has the unemployment rate risen 0.6% without the economy slipping into a recession.

Last weeks political fear of dropping the rates will inevitably increase unemployment and drive the UK to similar rises in unemployment as to the US. However the UK property market is not as exposed to the same levels as the US, but it’s certainly going to be a close run thing whether the UK slips into a recession.

Trumpo certainly hopes not.
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