Every day Gordon Brown comes up with some phony statement about how the economy is fine and how we will ride out the current problems. Increasingly it looks like he has lost the plot.
My circumstances are that our three year fixed rate mortgage comes up in the Autumn and it will mean an increase of around £100 per month to out mortgage repayments. Yet if you look at my pay rise for the last three years added together I am now earning just about exactly £100 a month more after tax than I was three years ago. Meaning I will have effectively had three years worth of pay rises wiped out.
Now multiply this across the country, with millions of people's fixed rate deals all coming to an end and more and more people having to pay more for their mortgages, and what's more, tying themselves down to a set rate for three or five years. In effect, this means that we are not only going to see a recession in this country because of the effect of people paying more for mortgages (to pay for houses that will be dropping in value), but the system ties people in to paying recession prices mortgages for some years to come, thus stopping the cycle of money that might kick start a growth out of recession.
Gordon Brown has got to wake up to the fact that current interest rates are unsustainable high and have nothing to do with controlling inflation. Everyone knows that interests rates have no control over inflation which is now driven by a rise in fuel and food prices and has nothing to do with consumer spending, yet brown appears absolutely clueless as to what to do.