An immediate priority in the UK financial markets is to stop the economy from slipping from what could potentially be a severe recession into a situation that resembles a depression, one sector commentator has explained.
Jonathan Loynes, chief European economist at Capital Economics, said that should the Bank of England make the decision to slash the base rate of interest to zero, it would hopefully provide a significant boost to the economy.
He added: "All the indications are at the moment that there is an enormous credit shortage in the economy because banks aren't lending and households and companies can't get hold of the credit they need in order to undergo orderly economic activity."
However, Mr Loynes explained that this issue was not currently the priority and that at the moment the focus should be avoiding a depression.
The US Federal Reserve's Federal Open Market Committee decided on December 16th to establish a target range for the federal funds rate of zero to 0.25 per cent.
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