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The banking crisis made much worse a specific, long standing, problem whereby growing – especially medium sized – companies find it difficult to raise long term equity or loan capital in the UK.
He argues for "investment in a portfolio of low-carbon technologies, rather than a dash for gas which would raise long term costs and risks".
There is no way that present or future public spending, even in very large volumes, would under these conditions raise long term interest rates generally by enough to offset the positive effects of an increase in activity and a reduction of risk.
Similar(57)
The banks struggle to raise long-term debt.
Government borrowings raise long-term interest rates, stifling economic growth.
For European bankers terrified of being forced to raise long-term debt in choppy markets, that should be some relief.
Building houses does not raise long-term economic growth in the way that equipping a factory does.
A payroll tax cut would make hiring less expensive and raise long-term take-home pay for all wage earners.
Generally speaking, a rise of 1 percent in the expected rate of inflation will raise long-term rates by 1 percent.
It is surely threefold - to raise long-term capital for companies, to allocate capital to the most promising businesses and to provide a vehicle for savings.
That would raise long-term concerns about the future quality of banks' assets, but in the short term it would help to keep the economy ticking.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com