No one expects the Bank of England to cut interest rates today.
That is not because they should not do so. The case for a cut is overwhelming. Inflation is disappearing. High interest rates may be the biggest driver of continuing inflation, most especially through rents. And the evidence that interest rate rises have delivered no benefit to anyone but the wealthy is overwhelming.
The Bank will not, however, cut rates. There are three reasons.
The first is to spare themselves the embarrassment of admitting that the increases that they imposed were wholly misjudged.
The second is to spite the current and future governments by indicating that the Bank thinks it is in charge. Contempt for democracy will underpin this decision.
Third, they want to continue the upward redistribution of wealth within the economy.
All three of these decision criteria that they will use make the case for removing the supposed independence of the Bank of England. Labour will not, however, do that. In other words, the abuse will continue.
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The Bank of England management are not fit for purpose.
The Bank of England is very much part of the abusive Neoliberal cult dominating this country.
You are probably right to describe neoliberalism as a cult, but it is a very strange cult. A cult that never speaks its name.
I may have missed it or just do not read the correct newspapers/websites but I cannot ever remember any Tory politician, New Labourite, Clegg Liberals, Trumpton street Think Tanks, or other cult members ever using the Term.
In the early days of Thatcherism there was lots of confident chatter that Competition, Choice and the Market principle was going to save the world, but even then very little use of the term neo-liberalism.
Lately, Competition and Choice also now get very little mention. Principally I think because it is obvious that we now live in a world dominated by Monopolies and Cartels who increasingly offer no choice at all.
No choice being particularly significant because as I understand Hayek, choice was what was supposed to save us all from serfdom.
Why hasn’t the idea of using tax instead of interest rates to control inflation been suggested by Central Banks?
Or is it that the prime targets would be the wealthy?
They set it up to say that is someone else’s problem
They kept base rates at 0.5% for far too long as well IMHO. A generation grew up thinking of these as a long term normal, and I am convinced that fuelled property price inflation. Artificially low interest rates led to lower borrowing costs, so Banks and Estate agents realised they could ramp up prices to max their profits.
I think you are profoundly wrong
The price rise was the result of Osborne deliberately providing funds to stoke them – with £100bn plus funds
The interest rate rises have delivered no benefit to anyone but the wealthy, in other words Tories and their friends. They’ll want to hang on to that ‘benefit’ as long as possible, and sod the plebs. The thought occurs that as soon as a general election is called, the ‘independent’ BoE will magically reduce the rate and Sunak will say, look our plan is working you can trust us to blah blah….