The head economist from Lloyds TSB has commented on the unchanged base rate announced today, explaining that it was the need to keep a lid on inflation that led to the decision.
Although there is still a real threat of further economic slowdown the Bank of England could not afford to cut the base rate again since the underlying rate of inflation is higher than it should be. As the Lloyds TSB pointed out, a further base rate cut could fuel more rises in inflation, completely the opposite of what is needed.
He went on to say that, as far as Lloyds TSB can see there will need to be more indications that the economy really is in a slowdown mode before base rates can be considered for reduction again.
Although the general feeling may be that UK banks are currently taking a beating an investment expert has suggested Lloyds TSB makes a great investment opportunity right now.
The analyst felt that in the midst of what have been torrid trading conditions Lloyds TSB had announced very encouraging results. The bank has taken a cautious stance on mortgages, buy to let ones especially, and also any securities that are underwritten by assets.
This approach has kept Lloyds TSB away from the worst of the difficulties facing some other banks and left them looking strong as they move forwards. The bank appears to be a relatively safe haven with the cautious management approach but also offers the opportunity for substantial growth as Lloyds TSB uses its relative strength to maximise market opportunities.
A study by the Abbey National Business Bank department has found that around a third of small business owners are worried about the coming 12 months.
They see their economic prospects for the period as being of concern and even poor according to the feedback received by the Abbey National. About 12 percent of respondents claimed to see an increase in clients not paying bills, with about thirty percent seeing payment delays.
On a positive note though the Abbey National also saw some 14 percent of small business owners feeling that economic difficulties will bring opportunities. It is all about perspective said a spokesman, that and the ability to effectively manage cashflow to maintain the business when money is slow to come in.
