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Daylight robbery. That’s how I see the Bank of England’s interest rate rise.
We’re now at 4% after the latest half-percentage point rise makes it ten consecutive rises from the last ten meetings. And they’re not done yet by all accounts.
It’s grotesque if you ask me. Bordering on criminal. And I’ll tell you why.
This knee-jerk policy of raising interest rates because government inflation measures are above the level of 2% is the wrong solution. The inflation target should actually be zero! Inflation itself is a crime against humanity.
So how should the inflation target of zero be achieved? The Government and regulators should be doing their job and stopping the energy companies and the monopolists and oligopolists exploiting the war and their dominant positions in the marketplace. The price increases should be reversed.
Inflation describes rising prices, yes, but there are many reasons why prices rise. And none of them requires higher interest rates to manage. In fact, increasing the interest rate is itself a price rise for borrowers and inflicts further pain!
The key causes of the current retail price inflation are:
Energy companies have made excessive profits despite no fundamental shift in the cost of providing the energy – it’s all been off the back of rising market prices for gas or oil (look at how even the renewable companies have raised prices) - this is extractive!
2. Monopolistic and oligopolistic entities in general have exploited market conditions to drive up prices
What is not being discussed is the other form of inflation - asset price inflation.
The commercial banks, supported by the central bank, have poured billions of pounds into the hands of the wealthy for decades in the form of loans which have massively inflated the price of real estate and financial assets. This has resulted in unacceptable inequality and unfairly discriminates against the younger generations who simply are unable to acquire a home. This cannot continue!
The Bank of England is actually doing the opposite of what it should be doing. The poor and vulnerable are suffering enough already through abusive companies extracting profit from the system. And the bank is adding insult to injury and inflicting even more pain and suffering. The BOE should actually be reducing interest rates to zero, not increasing them to 4%.
Indeed one has to ask why the BOE is determined to inflict further damage on the poor and vulnerable. The reason is because they want to prevent a wage cost spiral and to make it difficult for workers to protect themselves and to earn a living wage.
This is grotesque! There is simply no compassion.
There’s no understanding from those in a position to make a difference that the ones who suffer are the poorer members of society who can least afford it.
People die because of this kind of policy, mark my words. They lose livelihoods as the rising cost of debt and cost of living drive them into destitution.
Higher interest rates are estimated to have handed banks in the US an unearned bonus of around $130 billion per year at current rates.
Where’s the vision?
The state has a role to play – but not by propping up the institutions that failed before in 2008 and are failing again now.
We should be looking at how we can use the power of the state to build a framework to rebuild from the ground up.
True freedom and happiness come from building relationships among people – starting from families and communities.
We should be lending this money at local level for use by communities and businesses that serve the needs of those communities. That’s how we will make a lasting difference.
I see an exciting opportunity to reset our economy and I urge you to join me in raising your voice for change. #phillipullmann #bankofengland #ukinterestrates #debtcrisisuk
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