COMMENT The problem is no longer the price of credit that the Bank of England is recommending but the availability of credit. When the monetary policy committee meets tomorrow to review its interest rate policy, it should pause before automatically reaching for another headline-grabbing large cut in interest rates.
Business groups and others are lining up to urge a new cut, in desperation at the state of trade and the difficulty in getting bank loans. They should ask themselves: is it the base rate that still causes them anguish, or the scarcity of credit, or the failure of the banks to charge them a similar rate to base rate? On reflection many business people may see that it is the latter two issues that cause them most current concern.
