George Osborne urges that we need further interest rate cuts

George Osborne attacks Alistair Darlings Pre-budget report package and calls for “radical monetary action” urging the government to intervene directly in the banking system to make banks lend more and to cut the base interest rate further.

Mr Osborne insisted that there is room to cut rates further, stating that in the US the interest rate is at 1 percent indicating we can cut from the 3 percent base rate we have at the moment.

The Shadow chancellor also made reference to the US Federal Reserve now lending directly to businesses and cutting out the banks, saying that this is an action the UK government could take.

The UK Chancellor Alistair Darling unveiled plans on Monday at his Pre-Budget Speech that the government will be borrowing as much as £118 billion in a single year – this move will see the national debt being pushed up to £1 trillion. He also added that he will be increasing national insurance contributions to raise some of the £20 billion he is borrowing so he can make tax cuts, which he has put in place to help the UK out of recession.

Source: Telegraph