The following is an approximate transcript in the interview.
Press TV: Exactly how should we see this situation : certainly it seems that every time we speak about economics in the UK the drinks are only getting worse?
Farje: Well, our economy has grown a lttle bit in the last couple of months so it’s not such a bad down side news. The problem the Bank associated with England has is that it are not able to maintain low interest rates for far too long because of fear of inflation.
Now, what these reports say obviously is the fact if it increases mortgages after that many people are going to be in danger of dropping their residences.
On the other hand, low interest have been affecting savers. Numerous savers happen to be getting almost no return on their money — the money they are saving for quite a long time and therefore they might benefit when there is a small System.Drawing.Bitmap interest rates.
The Bank associated with England has predicted that it might have to enhance interest rates by next year or the yr 2015 to be able to control pumping and pumping could be more damaging than high mortgages.
Alternatively the problem is of which part of the growth of this economic climate is due to interior consumption…. in many ways it is far from a very positive economic voice – internal consumption. Which internal usage is based, when you rightly mentioned, on credit cards, loan payments etc, and so forth
This plan has been going on for the last couple of years anyway as a result of inflation, but that’s going to boost obviously in case their current situation is delayed.
Right now, even though there have been an increase in work… the living conditions are very reduced because the salary are very low and people cannot afford to buy meals.
And so the situation is fairly complicated, it truly is true there is an economic cause, but economic cause is because of internal consumption – expenditure; and expenditure is always harmful because there is no strong sort of expenditure industry and at the same time people are getting into a lot more debt and if you enhance interest rates these kinds of debts are likely to grow and folks are going to endure.
It’s a catch-22 situation, however the Bank associated with England are not able to maintain low interest rates for much too long since they need to handle inflation because inflation can go up and this seem to be as poor as higher mortgages, thus…
So , it is just a bit of a catch-22 situation, yet yes, many people may shed their home if interest rates increase and they have to pay more for mortgage and spend more of their hard earned salaried in settling their house.
Press TELEVISION: As you describe it properly this is a catch-22 situation for your government, yet how much of this trap that the government discovers itself inside is its very own doing?
Farje: It is of its personal doing as a result of cuts inside services; they haven’t had the opportunity to invest in facilities – which means that they are cutting more and more services and individuals have had use of fewer services and they have to invest more money in trying to cover this. This specific expenditure ought to come from the authorities.
The second thing would be that the government retains on speaking about, oh, our company is more seeing more job, we are increasing…. yes but this in a way is deficient because of the interior consumption and they are not handling that; in addition to secondly, the particular living conditions are usually worse than they were before.
Many people are functioning part time; people are working whatever they call no contracts – that means which they call an individual when they need you – You don’t have a salary; you’re not qualified for holidays… and they haven’t been able to control that.
And another serious problem will be ‘pay day’ loans. Folks raising the eye rates in order to 1000 per cent per month, so called pay-day loans, which in a way are loan sharks – sort of legally-accepted loan sharks.
The government has not controlled this inflation, they help keep on cutting services; they keep on trimming basic investments in infrastructure which doesn’t allow a growth associated with employment or perhaps also quality lifestyle and that is typically the fault of the government – They keep on blaming the Labour government for that, but they are in power long enough to consider full obligation for their own shortcomings and their own choices, which are influencing more poverty.
There is a lot more poverty because they are cutting down well being services, they may be cutting down on impairment allowance and that makes many, many more individuals dependent on food stamps and poverty such as any developing country.
The situation is extremely bad as well as the government offers only by itself to blame.