Ask two economists that question, and they'll give at least three answers, one of which is likely to be "it depends".
Osborne I think is motivated by debt, the Bank governor says it won't hurt growth too much, but that there's a risk of much higher interest rates, which will. Which is what seems to motivate Vince.
If not cutting now will force interest rates up, then that is a bigger threat to growth, and it's growth that matters most.
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momijizukamori
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Date: 2010-Jun-24, Thursday 19:01 (UTC)Osborne I think is motivated by debt, the Bank governor says it won't hurt growth too much, but that there's a risk of much higher interest rates, which will. Which is what seems to motivate Vince.
If not cutting now will force interest rates up, then that is a bigger threat to growth, and it's growth that matters most.