As the FT has reported:
Bank of England governor Andrew Bailey on Monday said he was unable to stop UK inflation hitting 10 per cent this year, as he admitted sounding “apocalyptic” on food price rises.
As I tweeted yesterday:
The link in the third tweet was to my recent thread on this issue, available here.
In summary, the Bank agrees inflation is beyond its control.
It also agrees it has no appropriate tools to tackle the inflation we have.
It seems to agree that the inflation we have is of a type we have not seen before, as I have suggested. This is disaster capital inflation, not cost-push or demand-pull. Profiteering-exploitation inflation, if you like.
But Bailey said:
“This is the biggest test of the monetary policy framework for 25 years. This is when both the independence of the bank and the [2 per cent inflation] target matter more than ever.”
Except, of course, that they are not, because Bank of England independence is a sham and the 2% target is arbitrary. Both are just crutches for an economic policy that has achieved nothing for thirty years.
We need new thinking. I have offered it. But it's not going to be heard because the Right is intent on imposing hardship and Labour and the SNP are doing nothing of substance to oppose them, for reasons barely comprehensible.
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Julian Jessop tweets:
“According to Andrew Bailey, there’s nothing central banks can do about food or energy prices
Clearly the Swiss National Bank didn’t get the memo: Swiss #inflation was 2.5% in April
Swiss interest rates are very low but, more importantly, money growth has been kept under control”
I assume that is because their currency is considered a safe haven and has appreciated. Obviously the currency of every country can’t appreciate. So Switzerland is, basically, exporting their inflation.
Would you care to comment?
Without having looked at the data, no
“amputating your leg as the only medical kit he’s got is a saw“ – neat turn of phrase. Better than likening it to a hammer.
Bailey said “we can’t predict things like wars”, duh!
A democratically elected government was overturned in 2010, a civil war has been raging in the Ukraine since 2014, speaking Russian has been curtailed, you could sponsor an Azov sniper unit on Facebook and 14,000 people died in the Donbas before the latest Russian invasion. Russian tanks and forces massed on the border for months.
What is he talking about?
Keynes once warned about the economic consequences of the peace, currently it is evident that the economic consequences of the war were simply never considered by politicians. If they were considered then those politicians were of the belief that the increased penury of the poor was a price worth paying – for what?
I think you are repeating the points made by those who want to blame the war in Ukraine, on the west. A democratically elected government was overthrown in 2010. You are referring to Ukraine but in fact the ‘overthrowing’ of the govt. was in 2014. The Parliament of Ukraine voted overwhelmingly to seek more links with the EU but the President , Yanukovych, went to Moscow wanting to join the Eurasian Economic Union, made up of Russia, Belarus (the last dictatorship in Europe) Kazakstan and a few other former Soviet states. I think it is fairer to say, he was trying to overturn democracy.
14-16,000 died in the east but the figure given by the Organisation for Security and Co-operation in Europe, show that the Ukrainian forces lost c.4,000. Human Rights Watch has documented abuse of human rights by both sides.
The actual invasion was a surprise to a number of military commentators. They didn’t see how war could help Putin achieve his ends-as it has turned out. The war wasn’t inevitable.
Thanks for dealing with that
I’m afraid you can count me in with those who blame the West for Putin.
I’m sorry but we played our part as did the Ukrainians, Belarusians, Kazakhstani’s and Russians.
No one comes out of this smelling of roses I’m afraid.
It’s a monumental cluster**** but at least it shows that the institutions we set up after WWII are past their sell by date.
Putin is unpredictable and the war makes no sense – agreed. But the man is one egg short of an omelette and he should have been handled a lot better than he has been. An egotist criminal with his finger on the nuclear button – that’s what he is.
As I have said here already, the West saw its own glory reflected in the ‘new’ Russia and in its hubris mistook MacDonald’s stores, Mercedes dealerships and Luis Vuitton shops for ‘democracy’.
Whoops!! Wrong!
Now we can all repent at our leisure can’t we?
There is nothing to add is there? You summed it up a treat.
But what are they doing at No.10/11 in response to this?
What other horrors are they cooking up?
How are they (and excuse me) going to fuck it up even more?
That’s what I’m worried about.
PSR, you are right to be worried. So am I.
Andrew Bailey is clearly out of his depth, as are the members of the BOE committee “setting” interest rates. Only a matter of time before they will suggest going back to the gold standard!
Exactly Bill
I am in a group which is about setting up alternative generating equipment with the aim of getting g ‘off grid’.
Most are American preppers. There is much discussion amongst them that the US will go back to the gold standard. They are openly discussing which precious metal would be best to buy when the coming massive financial crash comes. So far it’s antique Silver coinage.
On Putin China needs added to the list of supporters. They didn’t exactly dissuade him. Got him to stall until the winter games were over. I wonder what propaganda they’re using to excuse the covid draconia? Maybe very nasty covid.
They really do not understand money then
The BofE seems to exist solely as a handy govt stooge these days. Presumably this is why the masquerade of CB independence continues.
There is a huge spider web in the corner of the house
lets nuke the house