The FT has noted this morning:
Wednesday's UK GDP revision shows that inflation is helping to drive the economy perilously close to recession as consumers are squeezed by rising prices, while businesses appear unwilling to pile cash into new investments, the FT reports. A toxic mix of high inflation, tax rises, slow wage rises and low confidence provoked by the government cuts is hitting consumers, driving spending down in four out of the past five quarters and leaving consumption 4.3 per cent below its pre-crisis level.
Somehow that doesn't read like a vote of confidence for George Osborne from the FT.
They add:
A low growth forecast from the OECD also compounded the gloom over the UK, the WSJ reports. The organisation's 2012 estimate has moved under 2 per cent since its last gauge to 1.8 per cent.
Another vote of no confidence.
And yet, despite all that the FT concludes in its own self confident style:
But the OECD warned that the Bank of England must raise rates by 0.5 percentage points by the end of 2011 to combat inflation.
Ah, so it's neoliberals together at the end then: they might agree they're trashing the joint, but they're also agreed they must go on doing so.
That's the Bullingdon way. Except in this case they're expecting someone else to pick up the tab for their deliberately destructive behaviour, all pursuit of their own indulgent self interest.
It's why we need politicians who say 'No, no, no' now. Because there is, there has to be, and there will be an alternative to this destructive hegemony.
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“And yet, despite all that the FT concludes in its own self confident style”
Forgive me, but they are just relaying what the OECD report said. From that quote alone it cannot be said that the FT supports a 0.5% rise in interest rates.
I think it does
You don’t
OK – that’s a difference of view
Raising interest rates at this moment in time would be rather like throwing petrol onto a fire to put it out. Borrowing would become more expensive. businesses will fail and consumers will be thrown into even deeper debt than they are already,
Why risk wrecking the entire economy simply to bring inflation down a couple of percentage points?
And couldn’t inflation be brought down using price controls rather than manipulating interest rates?
Unfortunately such logic is sound but ‘anti-competitive’ and so will never do
It does not pass the burden onto ordinary people through unemployment
And yes, I do think it a conspiracy
And you’re right to think it a mad one
Don’t bondholders hate any rise in the inflation rate because it affects the value of their bonds? Isn’t this one of the more likely reasons fpr cracking down on inflation at any cost?