The world\u00a0seemed surprised that the Bank of England did not increase bank rate yesterday. It should not have been. Nothing suggested that was appropriate.<\/p>\n
The government is sucking money out of the economy as fast as it can by trying to balance its budgets.<\/p>\n
As a direct result growth is suffering since government spending is a component of GDP.<\/p>\n
Investment is tanking in the face of Brexit uncertainty.<\/p>\n
Inflation is reducing as, entirely predictably, the impact of the Brexit rate change works through the system (simple maths makes this totally predictable).<\/p>\n
And house prices are falling as the attraction of the UK as a location goes into rapid decline meaning overseas demand is falling and taking heat out of system.<\/p>\n
Underneath all that consumption is reducing.<\/p>\n
There are no reasons for interest rates to rise.<\/p>\n
There could be grounds for a cut.<\/p>\n
And there is massive reason for a fiscal policy intervention by boosting government spending, although giving lifetime visas to bricklayers might be necessary to achieve that as they are in cripplingly short supply (absurdly).<\/p>\n
That a rate rise was even thought possible is how absurd some economic thinking is. Interest rate rises would make no sense in the foreseeable future.<\/p>\n","protected":false},"excerpt":{"rendered":"
The world\u00a0seemed surprised that the Bank of England did not increase bank rate yesterday. It should not have been. Nothing suggested that was appropriate. The
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