11:33 AM, 11th November 2011, About 10 years ago
The Bank of England has left interest rates at the record low of 0.5% for yet another month.
The result is not unexpected as the Eurozone smoulders after attacks from investors and markets around the world.
The perceived indecision of the major Eurozone players is now becoming more obvious – Germany and France are wavering on the brink of pulling the plug on the currency unions weaker economies.
Sharks have already picked off Greece, Portugal and Eire, which have gone cap-in-hand for bail-outs.
Italy looks next to tumble – and the next target of speculators would be Spain.
As the Eurozone languishes under a cloud of economic disaster of their own making, the Bank of England monetary policy committee must have breathed a sigh of relief that Britain is outside the Euro.
The big question is do Germany – and to some extent France – have the will to rescue the Mediterranean economies. The Eurozone is essentially a north\south divide between the Latin economies and the rest.
Germany is returning a strong overseas trade balance sheet, but Angela Merkel is playing her cards close to her chest by not letting on about her thoughts for the Eurozone.
No doubt last week’s G20 summit is providing food for thought as the Euro nations agreed to a trillion euro bail out fund – but as David Cameron has made clear, the money has to come from the Eurozone and not from outside.
Merkel has floated the idea of emerging economies like Russia and China buying bonds, but so far, there are no takers.
So what does the demise of the Eurozone mean for the UK?
As one of our main trading partners, a fall in demand from British goods would knock on to more unemployment and business facing financial difficulties or closing.
The Bank of England will still control official interest rates, but banks and building societies are likely to see the cost of borrowing increase – and with that will come rises in mortgage and credit card rates.
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