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Pre-Budget Report

We can all agree on the importance of monetary policy. Nobody wrote with greater authority or greater length on the subject than John Maynard Keynes. We need not argue about that, but the point is that when the bank rate goes down to 1 per cent., 0.5 per cent. or even zero per cent., as the Governor of the Bank of England was suggesting only yesterday, monetary policy enormously weakens. Anyone using that weapon alone is in a very serious situation. That is why the liquidity of the banks is now the crucial issue and the next most crucial and closely related issue is how we are to avoid mass unemployment in the years ahead.