Even in my scruffy state, I have to tell this to you. I’m in a state of absolute shock.
I’m so tired writing and talking about the Bank of England, Andrew Bailey, Jeremy Hunt, and interest rates, I feel like never doing it again, and it certainly doesn’t seem to be doing any good.
But, whilst I’m having a day off, I was floored to see a man without 24 hours’ work experience in anything to do with money, finance, or banking in his entire life tell another man who is not even an economist and with a track record of absolute train crashes to hold interest rates where they are, despite inflation falling from more than 11% to just a tad over 3%.
The first thing is, if Hunt can exercise this power all of a sudden, why didn’t he do it many months ago and tell Bailey to start lowering interest rates?
Secondly, do these people not know after 14 rises which did nothing to curb inflation, that our non-consumer driven inflation is not affected by interest rate rises? That making money more expensive for people when the price of things over which they have no control such as food and energy and war in the Red Sea and elsewhere does not help, but hurts?
And yet Hunt tells Bailey to leave rates where they are until we’re sure that inflation is falling. If he even had a copy of “Economics for Dummies” he would know that this is exactly the opposite of what should be done.
And, further, that leaving rates where they are, they are simply going to prolong the time before the inflation falls by itself, which cost – inflation always does.
I don’t know who wins the prize for being the most mistrusted, disliked, out of touch British politician, Sunak, Starmer, Hunt and I’ll put Bailey in that equation. But they all seem to be fighting viciously for that honour.
Roger Gewolb is a financial entrepreneur, lending expert and champion for fairness throughout the consumer finance industry.
