As the FT reported last night:
The OECD today delivered a gloomy outlook for the global economy, highlighting sticky inflation, a softening of growth, slower trade expansion and faltering business and consumer confidence.
It also warned that the European Central Bank and Bank of England might have to hold interest rates at their current highs until 2025 — much longer than markets are expecting.
Now why would it do that?
Could it be because Clare Lombardelli, chief economist of the OECD, is ex-Bank of England, by any chance?
And could, it also be that she seems to share the Bank's incoherent view that when an economy is down interest rates must be kept high just to ensure that nothing can get better?
I am only guessing, but I think that might have something to do with it.
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Interest rates high & thus self realising in terms of slow/low economic activity.
High interest rates compared to 2020 stifle doing things such as investing in renewables – which depresses economic activity – it is quite bizzare.
In my view the OECD and associated agencies such as the IEA have long passed their sell-by-date.
The IEA, talked trash on renewables for upwards of 15 years (the histroical record demonstrates this), countries listened and here we are.
The OECD is doing the same. Both places are dumping grounds for the unemployable.
I have a simple question. Does the Bank of England or UK Gov deliberately keep base interest rates high to mirror US and keep GBP from crashing?
I do not think GBP comes into it very much
They share an ideology