Thursday, November 06, 2008

It's Official: BBC Business Editor Peston is Confused


Robert Peston is confused. While the Bank of England lending rate - and our tracker mortgage - have been cut by 1.5% he reports a major bank bidding 7% for a multi-million pound depositor's business. How then will that bank now lend at a useful rate to a needy small business?

Well Robert, will they not likely use cheaper money from the BoE, the Fed, or China to do that? It's not as if everyone is either requiring or getting 7% now is it? or even as if money acquired at 7% cannot be lent at 8 or 9% to a good risk. Why speculate about 14% lending rates?

Anecdotes are the curse of the non-evidential classes and you sir really should know better by now. "Hope" mate. Yes We Can. And all that.

2 comments:

The Lakelander said...

Dr Lakelander and I paid good money to listen to Robert Peston at the Oxford Literary Festival earlier this year.

He turned up 20 minutes late, having had trouble parking his car.

By the end of his talk, we were giving serious thought to asking for a refund.

If you think he's chaotic on TV, you want to see him in real life.

Not.

Chris Paul said...

Thanks for the tip Lakelander. I would never have guessed!

The combination of free but unreliable money e.g. balances in current accounts and crappy savings products and expensive money e.g. Peston's trillionaire mate's loose change, plus a bit of in between market rate money makes sensible borrowing rates possible.

When I was doing my headline I couldn't remember whether Mr Peston was Finance Editor, Economics Editor or as it turned out Business Editor and I'm really not sure he quite understands any of the three.