Most MPs tell me the Bank of England is independent. They tell me its sole purpose is to keep inflation down to the 2% target Parliament has set it. Yet when inflation runs more than five times target most MPs have no wish to debate why or to venture any criticism of the Bank.
They ignore the fact that government and Parliament appoint the Governor, set the target, approve and underwrite all the bond buying the Bank has been doing which meant ultra low interest rates, and question the Governor through a Select Committee. It has been lonely criticising the Bank for printing too much money in 2021 and now for destroying too much money in 2023, though all this has been approved and indemnified by government.
It was therefore a pleasure to read the DailyĀ Telegraph yesterday with a leader and a good article criticising the Bank for its role in creating and allowing the inflation to take hold. The paper should go on and criticise the Bank for disrupting the bond market with its large Quantitative tightening programme last autumn, having to reverse it temporarily when it saw the damage it did toĀ the LDI/pensions market, and ask more questions about whether they have now lurched from money being far too easy to being too tight.
In future articles I will look at why the Bank has got so many of its forecasts of inflation wrong in recent years, how it could improve its track record and how it should now proceed. I will stress that in practice the Bank has three aims, not just one. It does need to consider growth as well as inflation, and above all needs to ensure financial stability in the banking system that it regulates and finances. ItĀ had a bad record in the period 2006-10 doing this.
March 26, 2023
Good Morning,
We’re experiencing financial shock; borrowing has been too cheap for nearly 15 years. governments, our particularly, have grown fat and silly on almost free money. The present PM couldn’t give money away fast enough while he was chancellor. This reset to real cost of money is going to be painful, and government is going to have to cut expenditure.
Wait till the mortgage market start to get into trouble with all the fixed rate loans being adjusted, and the variable rates now rising fast. Yo ain’t seen nothing yet!
March 26, 2023
If we’re discussing mistakes, then what about that howler made by 17 million?
Reply See you still despise democracy and do not want to live in an independent democratic country.
March 26, 2023
Martin the mistake is in electing MPs who will not carry out the wishes of the electorate.
Perhaps we are due a ‘root and branch’ pruning of the sheep in the H of C, while transient PMs pick their mates for peerage.
March 26, 2023
You think the collapsing Credit Suisse and the teetering Deutche Bank and shining examples of where we might have been had we foregone being a country and a nation šš.
Can you not comprehend that although we have an incompetent Governor and Board of the BOE, our MPs (as JR regularly demonstrates) can hold them to account. So we have a fix which we otherwise would not have.
We the public need to upgrade the quality of the people we choose to represent us so that JR does not have to run nursery school classes teaching MPs what a Bond Market is. Iām wondering whether those classes should not include those on the BOE board and the Governor!
No wonder he feels lonely!
March 26, 2023
JR: “See you still despise democracy and do not want to live in an independent democratic country.”
Nothing in that statement was true.
March 26, 2023
Sir JR,
What a low and unnecessary response
March 26, 2023
Peter
I tend to agree, many have not yet suffered the financial shock of rate rises having been protected by fixed rates, once they unwind millions may/will be in trouble.
Interest rates were far too low for too long, many thought it was normal, it wasn’t as historic rates showed.
March 26, 2023
The problem isn’t with the BoE – it’s with a government that DOESN’T WANT TO GOVERN. This is all part and parcel of the problem we have discussed here before: the fact that the government allows bodies that have public responsibilities to be independent. Be they the BoE, quangos, the police, the judiciary, or whatever – they should all be under the direct control of government ministers who should ORDER them to do what the government wants. The public elect politicians – and can kick them out. Those in charge of all these other organisations are NOT elected, and therefore for them to have any form of power is completely UNDEMOCRATIC.
The government needs to have complete authority to fulfil its promises to the people, so that they can then be help responsible and ACCOUNTABLE for how well they have done so. The government needs to change the rules so that they have full power over all these bodies. Then, if the government fails, they cannot blame anybody else and deserve to be kicked out. At the momemt we have the worst of all worlds: a government that is not able to do what it wants but is blamed by the people for failing. Why ministers put up with this is a mystery; it can only be that they are too weak and cowardly to try to change the system and don’t actually want POWER, only the trappings of office.
March 26, 2023
The Bank of England follows the UN/WEF group think. It does nothing to assist the UK economy just like Fishy and Chicom.
Now we’re having a beauty parade if SMRs instead of investing in Britain using g Rolls Royce technology
Another bet zero farce.
March 26, 2023
Ian Wragg
Yes it is amazing at the stupidity of this government. They will buy cheaper (maybe) from overseas but as we have learnt to our cost with other capital investments in the past, when you consider loss of tax revenues, jobs and support facilities it turned out to be expensive.
I would be happier know that maintenance and breakdown engineers are within less than a days travelling.
It’s all another piece in of the globalists cunning plan to tear us down and rebuild us in their own image.
March 26, 2023
@Ian Wragg; As do our govt, after all it is not the worlds Central bankers in those UN & WEF ‘Family Photos’, it’s the worlds political leaders.
As for SMRs, surely market forces should prevail or are you suggesting a core plank of Thatcherism was wrong, if so glad you have finally seen sense!
March 26, 2023
But buying in is seldom value for money. Ajax ranks for starters
When you calculate the loss of jobs and tax revenues (which other countries do) they are seldom cheaper and very rarely better
March 26, 2023
@Ian Wragg; Indeed, and many said just that back in the 1980s…
March 26, 2023
The Bank of England’s one sole purpose is to act politically. Its function as a financial body ceased some years ago
Bailey’s recent comments about private companies raising their prices ‘hurts people’ is wholly inappropriate. This blame mongering of the private sector is oh so easy for public sector lackeys like Bailey who don’t have to justify their salaries by actually producing and selling things. The man’s a joke of a central banker, more a lackey for Labour and some of the Socialist halfwits in the Tory party
Some advice for Bailey, shut up
March 26, 2023
The Sun would print a critical headline about Bailey, but they canāt find a word to rhyme with āBankerā.
March 26, 2023
Most of could help with that if we were asked.
March 26, 2023
Bailey was in charge of the notoriously ineffective Financial Conduct Authority. Worse than that, he had a reputation for falling asleep in meetings!
That said government appointed him, as John Redwood points out. So they either failed with due diligence, or they ignored his weakness because some other factors were in his favour.
Carney had an altogether better reputation, though he worked for Goldman Sachs which may ring alarm bells.
It will continue to be ālonely criticising the Bankā. Most of the media are onside with what government does, if not actual cheerleaders for it. The Windsor knot being the latest example.
March 26, 2023
I agree fully. The Carney and Bailey eras at the BoE have been appalling for the country and the economy. Bailey at the FCA even gave us circa 40% personal overdraft rates one size for all good risk or bad at nearly all banks. Why exactly? Surely unfit to run a piggy bank.
March 26, 2023
There is a huge hole in the bottom of piggy.
March 26, 2023
Like the government and civil service the bank should also be very focused and pro active in recognising and eradicating waste throughout its management and operational procedures. They are not above criticism and accountability.
March 26, 2023
Good morning.
At the end of the day I do not necessarily blame the BoE or all the others for everything that goes wrong. MP’s and the government are there to act on and for our behalf and must themselves take responsibility for what does and does not happen.
Perhaps, like so much else (eg QUANGO’s), saying that the BoE is independent provides adequate cover when things go wrong.
And the bad record did not suddenly begin and end in 2006-2010. It has been on going.
March 26, 2023
Mark B
MPs and governments take responsibility?
In our dreams maybe.
What about accountability?
March 26, 2023
A Government that attempts to dignify the Bank of England with tolerance of incompetence is even worse itself.
March 26, 2023
So what your article is highlighting Sir John, is another failure of government. The Daily Telegraph comments were overdue. I have long held the view that we are headed for financial disaster. The apparently seamless transition of the banking system from accounting in millions to accounting in billions suggests a lack of regard for financial stability. Sooner or later a devaluation will be necessary. We cannot go on dealing with ever larger sums. Perhaps one of your forthcoming articles could cover this issue, JR.
March 26, 2023
You are in a position to influence these matters. Have you spoken to the Chancellor and/or Governor about your concerns? What did they respond? I agree with your analysis to some extent but the banking crisis and Covid had to be dealt with at the time.
Methinks this is like the share touts who say ‘ if you had invested in Apple in 1995 you would have made a fortune’- forgetting the nearly went bust at one time. Wise after the event!
Reply I warned them they were printing too much in 2021 and warned them re QT last year!
March 26, 2023
BOE must never allow its interest rate to go below 2%.
March 26, 2023
@Tony Hart; That sounds more like a soundbite from ‘Savers R us’, not an evidence driven economic policy. š
What I would suggest is we must rid ourselves of un(der) regulated loans, and that includes retail BNPL, that prey on low interest rates, there were very good reasons why our forefathers put credit controls in place.
March 26, 2023
The attitude and approach of the “most MPs” are a disgrace and shows them up for the useless articles they truly are.
As for the Bank, it seems central banks generally are just not very good at their job.
March 26, 2023
People are telling me that internationally, in lockstep the central banks are engaged in a planned, controlled demolition of the world economy. This to enable the imposition of a digital currency which will track and control our spending via apps.
In this scenario one would not be able to access money without the digital ID needed to get onto the internet.
Govt is beavering away with a digital access to its sites but Penny Mordaunt categorically denied in parliament that there are any plans for actual ID cards referencing āconspiracy theoriesā.
The bossy, politically woke banks would really come into their own if digital currency became a reality.
Please God this actually IS a conspiracy theory!
Reply Yes, an unlikely story
March 26, 2023
Reply to reply.
Oh thank you J.R.
One fewer nightmare!
March 27, 2023
Cuibono – Reply to reply to reply – Beware of false prophets.
March 26, 2023
I used to thing it unlikely that politicians & vaccine regulators would knowingly push/coerce net harm/likely very risky and fairly ineffective vaccines into people & even those who had no need for them even had they even been effective. See the latest Dr John Campbell videos.
March 26, 2023
+100
Yes. I have followed him for a while. And others.
I am puzzled about why the MP who tried to talk about all this then moved on to the subject of digital currencyā¦leaving himself open to āconspiracy theoryā criticism again. Do they think that the latter might debunk the former?
March 26, 2023
Cuibono,
While we might all opt for total anonimity, a national identity card does have its virtues. If the National Police are in control of its issuing as in Spain, then we might gain an idea of who is in the UK legitimately and who is not. In Spain it was used all the time for simple actions like signing for a parcel at the front door to buying a house. Its use was never a problem and obviated the need to get a passport stamped on leaving or entering the country. In the UK we would first require that there was a competent authority , closed to political or any other influence to control an ID card system. Sadly we do not have one. On these grounds alone I would oppose it, while in principal liking the idea. Before screaming in opposition consider all the other information gathering systems we already have. Mobile phones, Cookies, Store Cards, Driving Licences, Bank Cards, Passports, CCTV, and whatever is taken from your computer activity that leads to a sudden proliferation of adverts for whatever it has triggered.
March 26, 2023
I had no intention of āscreamingā!
Nor would I have much opposition to proving my identity if any of these measures had ever made us safer. Or if they had obliterated crime.
Unfortunately on both counts they have failed totally.
So…I can only conclude that ID, in any form, has another purpose altogether.
March 26, 2023
Over the past three years, The delay between conspiracy and the Government announcing the implementation of its latest authoritarian scheme went down to about 6 months.
So I wouldn’t sleep too easily Cuibono. The Government has just carried out an unadvertised “public consultation” on the introduction of Digital ID. Do you really think they held that “consultation” because they had no intention of implementing one?
March 26, 2023
+1
Agreeā¦no I have not slept easily since it became obvious that Brexit was no going to be honoured. And nothing is getting any better!
March 26, 2023
The conspiracy theory might be nonsense but there is little doubt that many adopted Modern Monetary Theory (aka The Magic Money Tree) in the belief that with FIAT currencies they could print endlessly without penalty. Western Governments have done so and debt levels are at astronomical levels as a result. Watching currency changes each morning is amusing – the Pound is stronger than the Eruo today but has fallen against the Dollar – when in real terms they are all falling. So not a conspiracy but certainly a herd mentality that is causing tremedous damage to peoples ‘wealth’ – by which I mean their ability to live independant lives, not dependant on Government largesse.
March 26, 2023
+100
Trouble is that once your govt. has locked you up and ruined the economy because of flu or whatever it is easy to believe anything.
Although I never for one minute believed that money could be printed without consequences!
Could they really, honestly have believed that?
JR always knew ( obviously).
March 26, 2023
@Cuibono While there is this coordinated seemingly socialist doctrine in place, the one question not answered and this even applies to every minutia of our daily life down at the local level ā how do you make things work on a one size fits all basis. Then on the other hand suggest we are all different, with different abilities and needs.
March 26, 2023
+1
Not that I particularly understand this ā¦butā¦
apparently the dividing up into (often warring) groups is a deliberate tactic to bring about āequalityā.
This is not a nice thing but a cutting down to a very low level where we are sexless, stateless and own nothing.
Think 18th/19th century brick fields. Mayhew ā London Labour and the London Poorā except of course for us it will be worse because we are so regulatedā¦we will have no trades and nothing to sell!
March 26, 2023
Well, we know that even Britain is working on digital ID and digital currency. Iāve read thatās not very advanced yet. Itās also been said that cash will run alongside digital, but who knows?
So Cuibono, I share your concerns. Especially after speaking to a highly educated professional who assumes that digital currency would mean the same as now without the trip to the ATM.
March 26, 2023
+1
100% agree.
Yup! We would sit in our houses and buy everything online at the click of a mouseā¦until we exceeded our carbon allowance. And then ā¦no more purchases until reparation had been made.
We might not even know or ever find out why a certain amount of digital money had been debited.. Maybe we broke curfew or strayed out of our zone?
I think it was Sunak who said that currency would run concurrently?
Would the rich REALLY be happy to have their dosh digitalised?
March 26, 2023
Cuibono, don’t be put off by official reassurances that there’s nothing to worry about.
The BoE and the Treasury are supposed to be ‘consulting’ on CBDC. But it’s a foregone conclusion, to judge from what the Deputy Governor of the BoE said on their website last month: ‘On current trends it is likely that a retail, general purpose digital central bank currency – a digital pound – will be needed in the UK.’
A digital currency will almost certainly mean a digital ID. Or do we think it’s a coincidence that in the same week the government published its consultation on a ‘digital pound’, it also published its consultation on Digital Identity?
March 26, 2023
+100
No..my worry level remains sky high.
After 2019 etc I tend to always expect the very worst.
March 27, 2023
and you are mostly correct!
March 26, 2023
I donāt see why the BoE has to be independent, bring it back to the treasury, make the cabinet & the treasury responsible for fiscal, monetary and supply-side economics ā¦.and disband the OBR quango
I’d like to see real reform of the BoE and an execution plan in the next manifesto
March 26, 2023
A good rule is that any organisation they feels the need to claim it is āIndependentā never is. Who hires and fires them, who could replace them or cut/remove their budget?
March 26, 2023
@glen cullen The BoE worked extreamly well when it had responsible Governments directly managing it. Then the OBR wasn’t needed, niether was the ONS. All consume and get bailed out with Taxpayer Money, and nowadays with a Conservative Governmen refusing to just ‘Manage’ the essentials, these entities get a pass on responcibility and accountability. Before the current structure everything just worked, we didn’t need the QUANGO’s either supplying they are just there to supply jobs-for-the-boys at the taxpayers expence
March 26, 2023
Last time a candidate advocated reform of the Bank it brought her administration down.
March 26, 2023
The idea of the BoE, or any institution for that matter, being in the hands of the Treasury fills me with horror.
Surely it needs competent management.
March 26, 2023
The BoE have always seemed to me to be reactionary rather than controlling. Consequently they are always chasing the problem. Economics is to me a very inexact science that is unable to plot a viable path forward. For me they lie well behind meteorology which is getting better at predicting our weather, the downside of which is that they sometimes act as a mother hen with their array of coloured warnings. The moral of which is always take an umbrella and keep your wealth in the Caymen Islands.
March 26, 2023
A favourite analogy is that the BoE drives by “only looking in the rear-view mirror” – which of course most drivers do – but generally only when they are reversing.
I’m afraid Andrew Bailey is one of the least impressive Governors we’ve had and he’s going to be there for a few years yet.
March 26, 2023
His nick name is Lullaby because he’s always asleep.
March 26, 2023
Economics ‘may’ be an inexact science but we learn from situations and responses through history.
The trouble more recently is that the people deciding are not doing so for the good of the country anymore!
All things are not being equal.
March 26, 2023
Agree but I am not sure there are enough brain cells in Parliament to hold the BoE to account. Some much is sub contracted government by Parliament.
March 26, 2023
Actually we scarcely have banks anymore.
They no longer fulfil their primary function and their abandonment of the High Street has accelerated its demise.
Take a wrecking ball to everythingā¦that is the motto of those in power. Put everyoneās eggs all in one basket.
Do they even have an inkling of how often internet banking sites donāt work? How difficult it is to get in touch with anyone when something goes wrong?
Not to mention possible power outages.
March 26, 2023
@Cuibono +1
The Banks are now rewarded for failure so either take more risk, or just complacency plod along.
March 26, 2023
+100
Yes basically they can do as they please and of course they have us all over a barrel.
March 26, 2023
We certainly don’t have “local” bank managers, who not only knew their customers (and businesses) but who were also able to make serious decisions about credit. These days there is the illusion of local management but the reality is that major decisions are made by Head Office via automated rules. My father worked for a High Street bank after the war and the bank had weekly ‘lunches’ for local businessmen. Introductions were made, views exchanged and business done. The Bank had a very good idea of what was (really) going on in the area. I’m still a private customer of that Bank (formerly also a Business client) but I’m certain they don’t have the insight that they used to have, in spite (or because?) of their automation.
As an aside – I was struck recently by an explanation of why the US has so many small local banks compared to other parts of the world. It is apparently because they exist to service “Agri” business (e.g. Farming) where so much local knowledge is required to do business successfully in this high risk area.
March 26, 2023
+100
I so miss the banks. We had loads here and they have all gone.
March 26, 2023
@Cuibono; [retail banking] no longer fulfil their primary function and their abandonment of the High Street has accelerated its demise.”
Indeed, and for some branches that remain, upon entering one has to check that you’ve actually entered a bank and not the coffee-bar next door, all whilst avoiding an interrogation as to why you are daring to use what passes as the bank counter these days and not either an enhanced ATM or a computer. Wasn’t one of the reasons the retail banks, and not just our deposits, were saved back in 2007 was to keep those banks on the High Street?
March 26, 2023
+100
Very good point.
They didnāt deserve saving!
March 26, 2023
If you don’t sack people who fail, they keep failing! Why has Andrew Bailey not been sacked?
March 26, 2023
Because he hasn’t failed. The policy he is implementing isn’t the headline one.
March 26, 2023
@Donna; They’re not Bailey’s policies, they are the govts, the BoE is regulated by, its Governor appointed by (and sacked by…), HMG. Otherwise, when inflation is above the set amount Mr Bailey would not be writing that letter of explanation to the Chancellor but to himself!
March 26, 2023
@Keith from Leeds
He failed when at FCA to address the LDI/pensions market when it was flagged up way back in 2016’ish. The demise of the Truss Government could be said to him covering his back on that failure.
We now as a Nation reward failure with other peoples money, the concept being punish success with high taxation so as to keep pumping even more money into prescribed failures.
March 26, 2023
A better question is why was he hired in the first place?
March 26, 2023
Perhaps they were impressed by his historical knowledge & his PhD thesis on “The impact of the Napoleonic Wars on the development of the cotton industry in Lancashire: a study of the structure and behaviour of firms during the Industrial Revolution.”
An industry that flourished once they had coal & more efficient & reliable steam engines to drive the mills. Now it seems the deluded dopes want to reverse things and once again rely on walking cycling, manpower and intermittent wind energy and hydro. The BoE under Bailey and Carney driving this deluded agenda too. With Baily and Carney types in charge perhaps we would have had no industrial revolution!
March 26, 2023
I see Sunak wants to let victims advise on punishments for criminals who say murdered their children or drove into them drunk and perhaps paralysed them for life.
Great distraction politics Sunak! From the Conservative’s appalling record for 12 years on the economy, healthcare, inflation, criminal justice, the police, education, public finance, energy, failure to deliver a real Brexit…
But clearly an idiotic idea that will not happen in reality. Concentrate on getting the police to actually investigate and deter some real crimes perhaps just for a change. They have given up on nearly all crimes as far as I can tell.
March 26, 2023
Neil Oliver’s monologue on GB News yesterday was an absolute barnstormer.
“Who watches the Watchers? Who guards the Guards?”
Well it’s supposed to be “our” MPs. But with one or two honourable exceptions (Sir John, Andrew Bridgen, Christopher Chope amongst them) most of “our” MPs are being paid handsomely for either turning their blind eye to the abuses heaped upon the British people or for actively encouraging the abuse to continue and be made still worse.
The Bank of England isn’t being held to account and no-one there will lose their job for their “poor performance” because they have been doing what they have been tasked to do ….. by the Globalists. The same people who installed Sunak and Hunt to do THEIR bidding, not ours.
And all the British people can do is vote, once every 5 years, to change the Watchers and Guards …… but even that process has been made virtually impossible in the UK.
But that is what we must do: Change the Watchers and Change the Guards. And not for another one of the Westminster Uni-Party.
March 26, 2023
What thought out marketing and finance plan can demand that car manufacturers have to produce 22% electric vehicles.
Unless of course there is a cunning plan by politicians to price petrol and diesel out of the market place leaving us on Shanksy pony. Where are all the purchaser’s and infrastructure going to come from to purchase and support them? They have totally lost the plot.
March 26, 2023
Most MPs and almost all the Government are delighted to be able to call the Bank ‘Independent’ because it gives them a shelter from accepting responsibility for what they are allowing to go wrong. What really beats me though, is why anyone thought Mr Bailey was the right person for the job of Governor in the first place. If all he can do is plead with businesses not to put their prices up, he makes it clear that he has no real understanding of the difference between the causes of inflation, and its symptoms and effects. Next, he will be asking for a Wilson/Heath type Prices and Incomes Policy.
March 26, 2023
All the DT has done is prove why few politicos are going to rock New Labour’s ‘bank independence’ boat, the BoE make decisions with the data at the time, their critics all to often make their comments with 20/20 hindsight. If 11 Downing Street still set interest rates, made decisions on QE etc they would still use the same data and surely come to the same conclusions – unless of course the Chancellor choose to put politics first, but that often did nothing but bring an economic roller-coaster ride anyway, the 1979-1997 period saw how many full bore damaging recessions, three was it, with innocent people loosing jobs or their homes, some lost both.
March 26, 2023
It all started with the lies we were told by unscroupulous and deluded politicians and ‘others’ leading up to 17 million voting for brexit. Incidentally a lot of these same ‘others’ have since high-tailed it out to Singapore and othef points South and West
We cannot say we are living in a truly independent democratic country not when we can still see on our TV screens an ex pm Boris being questioned about partygate but still unable to speak the truth – it’s not so much that the individual himself cannot speak the truth but it ‘s the support that he still commands from the gullible. This morning again we heard M,Gove when questioned was able to say he believes that Boris was telling the truth – Gove is either a terrible liar or else incredibly stupid – but since I also remember the lies he told the people prior to brexit I believe he is both.
March 26, 2023
There were a lot of lies told by politicians leading up to the Brexit vote, on both sides.
I made my decision as did others on this site I suspect, for my own reasons and in the knowledge I was being told a lot of nonsense.
March 26, 2023
āThe Bank of Englandās mistakesā same ole, same ole, Government and Parliament refuse if there is such a thing āaggressively refuseā to take on the job they are exclusively being given the powers and get paid to do ā manage the UK on behalf of the People, the Taxpayer.
To much time spent of ego, vanity and things they couldnāt possible get to grips with. To much emphasis on ālook at meā Iām a Minister, MP, PM even. This refusal to manage means this Conservative Government āgivesā taxpayer money to all and sundry, with not one once of responsibility and accountability attached.
Then in some quarters there is surprise that the taxpayer is being fleeced at a 70 year high. With even higher tax take on the way, even more failure to deliver just the basics. A Conservative Government deliberately and maliciously causing the UK to fail.
All this to dance around the function of Managing, ācut ones clothā accordingly or as Taxpayers call it in their own lives create a balanced budget.
March 26, 2023
Doesn’t the Bank of England, in practice, work within limits, constraints and targets determined by government? (I am asking, I don’t know). For example, I gather the B.O.E. sometimes has to write a letter when inflation exceeds target, but if the government’s response is to the effect that it was to be expected and that it is understandable in the circumstances, or if they had previously tipped the wink that it was OK, then that would seem to exonerate the B.O.E.. Or have I misunderstood?
March 26, 2023
You make a good case for the mass sacking of useless MPs. Unfortunately, the electorate is also mostly useless, being more interested in the back pages of their newpapers rather than the front pages.
March 26, 2023
Paying attention to the front pages (or the likes of the BBC) won’t educate them. They give a very warped report of the news.
If you want to know what’s really going on you have to search the independent sector, not in the pay of the likes of Bill Gates.
March 26, 2023
The BofE is and has for ages been dominated by Yellen . Sunak and Hunt are totally influenced by it and not by the conditions that the voters suffer from . Stimulation of the economy is a missing ingredient to individuals and companies — not constraints .
March 26, 2023
Talking about mistakes then what about Truss and Kwarteng and their proposed budget which just by their action alone they cost the country billions -now she wants to reward her backers with peerages? What are we talking about here this morning,? mistakes! am afraid it’s worse that mistakes.
March 26, 2023
It wasn’t Miss Truss who cost the country billions. That was just propaganda to bring her down and install the one who did cost us and still is. She has nominated four, three of whom would be good additions to the Lords, a whole lot better than many life peers, including the 100 or so failed Liberal councillors. I don’t know about the fourth so can’t say.
March 26, 2023
Allister Heath at the Telegraph seems pretty sound and deeply understands the Bank of England’s role, how it isn’t independent, and its failings.āHe’s also pretty good generally, e.g. https://www.telegraph.co.uk/news/2023/03/22/brexit-revolt-against-remain-establishment-has-just-begun/
You could try lobbying Liam Halligan.āI do think the Bank of England’s hand in starting the LDI problem, despite public warnings from the Pensions Regulator, deserves some journalistic digging.āBoth it’s timing, the day before Kwarteng’s budget, and how common an occurrence was it to pre-announce a trade, shifting the price in advance?āIt smells similar to Gordon Brown’s announcement of his gold sale to move the price and avoid the collapse of the globally significant USA bank which was heavily short on two tonnes.āAs told by Eddie George and reported in The Telegraph and a book by Willem Middelkoop.
March 26, 2023
Incompetence or sabotage? It could be either – or both.
The BoE MPC minutes show that they do indeed consider growth and a range of other factors, yet they still consistently get it wrong. One has to wonder why. Keeping us in lock-step with their beloved, but failing, EU is one possibility.
I think you’ll find modern MPs will be reluctant to discuss this because:
(a) few of them understand much of this – or much of anything else, to be frank and
(b) they don’t want the responsibility. If they ever become ministers, the less they have to do (or explain, or be responsible for), the better as far as they’re concerned.
March 26, 2023
What about the Fed increasing the US bank rate by 0.25% on 22/03/2023?
March 26, 2023
In reply to your comment of yesterday on CO2. It is not so much the CO2 walkers breath out it is the amount of energy that goes into producing the food that is the fuel of any walker or cyclist, Human food is very inefficient to produce especially for someone on a typical UK diet and meat eaters. Fertiliser to grow animal food, butchery, chilling, packaging, freezing, the wast, cooking, eating and conversion to leg power is not so clever.
It seems a single carnivore walker can actually be rather worse than a small efficient car per mile in energy and CO2 terms and the car could carry five or even seven people and is rather quicker and more convenient! Plus no hot showers required on arrival or hotels mid journey.
I am sorry if you find the truth embarrassing but do the sums.
March 26, 2023
and the energy required to make the human vs the energy to make the car?
March 26, 2023
Are all car drivers on a vegan diet or even starving themselves? Most cars I see during week days have one driver and very rarely five or even seven people. It might be different during the week-ends with families going around.
March 27, 2023
Obviously the walker or cyclist has to eat more to fuel to walking or cycling on top of usual consumption to maintain life.
I am not against walking or cycling but to claim they produce no CO2 direct or indirect as Gov. web sites do is complete and utter drivel. Pure propaganda or perhaps just written by ignorant fools with zero understanding of physics, CO2 and energy.
March 27, 2023
Week days – kids at school or watching screens at home. Millions of workers also at home watching Zoom or similar. Some will go out for shopping, health appointments etc.
Are you surprised most drivers are alone? The days of OAP couples going for a ‘drive’ has become unaffordable with a lunch somewhere ‘in the country’ has become a rarity.
March 27, 2023
Hefner – Panic, the FED is running out of money and the money laundering outlets are being closed down.
March 26, 2023
I donāt believe the BoE is making āmistakesā.
I believe that its purpose is to assist in the deliberate decline of the UKās prosperity and democracy.
The BoEās job is to reduce the wealth of the middle classes and cause the destruction of small businesses through high taxation, wasteful spending, increased employment of civil service and quango jobs, and inflation. The next step will be a wealth tax.
Net Zero is being used as the main driver of a reduction of our prosperity as evidenced by the Chancellor announcing in the budget the spending of Ā£20bn for CCUS to reduce annual global emissions by 0.1%. Not only a waste of money but also of resources.
Our Net Zero Strategy is devised to reduce the UKās wealth by ensuring the UK taxpayer is subsidising both the green energy suppliers and the consumers because the green energy bills are so high.
March 26, 2023
John,
Can I ask of the three aims, Inflation, Growth, and (internal) stability, is there an other agenda?
Is the BoE shadowing the EU Deficit and Debt rules, with an eye on realigning the UK with 60% debt, and 3% Deficit rules?
Is their excuse that they are looking for external stability?
Pointing to the Geopolitical conditions, and are they coordinating with the ECB, but also, Fed, BoJ?
There must be some consideration of the pact between China, Russia, OPEC+? Moving away from the Oil Dollar? The USA’s/Biden new Inflation reduction Act (Fully funding QE/debt?).
As well as External shocks; Ukraine, Dependency on external markets, Oil&Gas, …
So, how well are we prepared, we have not been saving for the long term.
And, the QE/QT program, and the question of should we be trying to Fully Fund (30yrs) the Debt?
Are we being forced, by the Financial Markets and Pension funds, to an overly (?) conservative debt repayments program.
And yet, the Inflation coming through to us, is Cost-push driven? Food, Energy,…
How much is our exposure to Imports a problem, and the real problem we have? Not letting us adjust to the changing conditions? Our Economy is still rigid, suffering from the effects of a Customs Union? And, an addiction to cheap labour (UC)? And, has allowed us to follow a cheap money policy, disfiguring the Economy!
And, how much can we actually blame it on the lack of long term investment, the lack of Productivity, and the lack of growth? The lack of Cheap Energy/Food/Fish strategy? The lack of flexibility in the Economy?
What is sad is how many people lot left behind, not having access to the cheap capital, and it is they that going to going to suffer! Even through Sunak/BJ threw debt around, with all the other damage Lock-down had!
Etc,….
Regards,
RDM.
PS: Pension fund LDi derivative positions, according to Reuters is going on for $167bn?
When Gordon Brown allowed Pension Funds to use Derivatives, it was meant to support them with the lack of growth? They could not find enough growth to maintain Pension Incomes? Do we still have this problem, because it will effect how well we can grow out of the position we find ourselves?
https://www.reuters.com/business/finance/mark-to-market-losses-ldi-derivatives-could-total-167-bln-jpmorgan-analysts-2022-10-13/
How long will it to unroll their positions, and what exposure does the Tax payer have?
March 26, 2023
Today’s criticism of the Bank of England in The Telegraph by Taylor Goodspeed: ‘Inflation in the UK is currently five times this figure at 10.4 per cent… in the aftermath of a military failure of similar magnitude there would be an internal inquest, an after-action report and the senior officers responsible would likely be denied future command. Such consequences do not exist in central banking, where one of the Bankās deputy governors was recently reappointed to a second five-year term.’ ā https://www.telegraph.co.uk/news/2023/03/26/bank-england-groupthink-has-made-inflation-worse/
He refers to the inflation of the ’70s, a common comparison because it’s within living memory, but Lyn Alden argues it’s much more like after WWII. ‘In the 1940s, inflation was fiscal-driven and public debt was high. In the 1970s, inflation was mostly lending-driven and public debt was low.āCurrently, the Fed is using a 1970s-style playbook to deal with 1940s-style fiscal-driven inflation.’ ā https://twitter.com/LynAldenContact/status/1629138065208868866
March 26, 2023
Interesting to see that the high street Bankās margin seems to be sacrosanct.
When is the state sector going to pay itās share of the Boris cost?
March 26, 2023
Sir JR
First it was the government getting everything wrong and not knowing what it should be doing, even when it has improved an agreement on NI Protocol wiah is better than the one you wanted to abolish.
Now, it is the BoE which has appently gotten most wrong for the past 1 to 20 years.
Sir Jr, are you turning into an angry old man?
or is it just that the rest of the world does not know any better?
March 26, 2023
Or is he reduced to be looking at the future in the rear mirror?
March 26, 2023
Sir John always seem positive and optimistic to me. To call him angry is not fair.
March 26, 2023
Dave,
It was a question not a statement
March 26, 2023
“First it was the government getting everything wrong and not knowing what it should be doing, even when it has improved an agreement on NI Protocol wiah is better than the one you wanted to abolish.”
It is not better, because the NIP was temporary and this Windsor Betrayal is not. How do we escape from it? What was wrong with the NIP Bill which enabled unilateral escape?
March 26, 2023
I look forward toyour article, Sir John. There is widespread misunderstanding about the role of the bank and its relationship to the government and to the OBR.
March 26, 2023
Past experience now tells us that giving Independence to the BoE was THE Mistake.
March 26, 2023
And allowing it to be packed with Brownites.
March 26, 2023
‘Government and Parliament . . . . . . . etc.’ you say, Sir John. You are saying the government is in charge, in control of what the BoE can do.
However, isn’t it actually the Civil Servants at the top of the Treasury that have seized control?
Just as civil servants in all departments have done.
If I remember rightly this was one of the correct moves made by Liz Truss. Didn’t she sack a top Treasury official?
To my mind, one of the reasons our country is in such a mess is that top civil servants are actually running it.
The Civil Service never wanted us to leave the EU and are determined we shall rejoin it.
Another reason we are in a mess is that we do not have two or three separate Political Parties competing at elections.
In fact, Conservative and Labour are one Uniparty. Almost all of you MPs are rather ‘left of centre’ now.
That includes most of the so called Conservative MPs.
March 26, 2023
That Permanent Secretary you mention, whom Miss Truss sacked, is said to have chosen Bailey.
March 26, 2023
rose ;
I’ve had the impression for a long time that it is the Permanent Secretaries who select the Ministers of State and in so doing select MPs who know even less than they do about the work of the department.
BEIS and DESNZ come to mind immediately.
March 27, 2023
Oliver Letwin told us in his memoir that nothing happened without Sue Gray’s permission. In his list of examples was Cabinet reshuffles.
March 27, 2023
And we still haven’t had an answer to Marcus Fysh’s question (which the Speaker crushed) about her part in the foisting of the NIP.
March 27, 2023
The BoE is not independent. It is part of the Central Bank system and it is CONTROLLED.