So the Bank of England has done it again. Just like last autumn, they have let it be known they might want to sell more bonds at big losses, whilst they plough on with a large sales and repayment programme for government bonds they own. Last autumn it was their statement of intent to sell ÂŁ80bn of bonds a year coupled with their wish to raise interest rates that started the big bond sell off. Last week it was musings about a bigger sales programme and market expectations of more rate rises to come on the back of poor inflation figures that triggered a similar sell off. As bonds fall so longer term interest rates rise. This matters, as it directly leads to dearer mortgages, threatening those who need to renew their loans with a further unwanted cost of living squeeze. Dearer and scarcer mortgages also means fewer new homes will be built, exacerbating our homes shortage. Itâs the last thing we need now. Stop the bond sales at these low prices. Let the bond portfolio roll off as the bonds fall due for repayment.
Â
    The Bank needs to own up to the big mistakes it made in 2021, keeping rates too low and paying crazy prices for far too many bonds. Now all it wants to do is to sell too many bonds at much lower prices and big losses. This erratically destructive policy if pursued too far will lurch us from too much inflation into recession. The Bank needs to revisit its models for forecasting inflation and output. In 2021 it was forecasting 2% inflation for today, yet it came in five times that as 2023 began. The Monetary Policy Committee declines to report and comment on the amounts of money in circulation, the state of credit and other issues which you would have thought a Committee with Monetary in its title might be interested in. They should ask themselves why price inflation stayed low in Switzerland, Japan and China, all big food and energy importers and look at their different targets and analysis to  steer their economies.
Â
    UK inflation results from too much cash and credit chasing too few goods and services. The Bank needs to get amounts of money in better order, and not lurch to too little. The government could help with the too few goods. The UK is chronically short of capacity of many kinds. We need to grow more of our own food, produce more of our own electricity and gas, make more of our own steel, cars, ceramics and the rest. Price controls, windfall taxes and higher business taxes make that less likely and will make inflation worse. Bring on the food growing grants to replace the wilding grants. Bring on the end of windfall taxes now the windfall surge in global oil and gas prices is over. Set corporation tax competitively. This will bring in more investment, encourage home based expansion, and start to correct the capacity shortages that damage us today. The current model is subsidy driven with government needing to offer large sums to get a single new car or battery factory over the line.
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May 30, 2023
Good morning.
We’ve had the, ‘Gordon Brown Bottom’ (gold) and now we are getting the, ‘Andrew Bailey Bottom’ (Bonds). Oh what fun – NOT !!
Interest rises will not hurt as many as currently most mortgages are fixed but . . . ! Over the next year it is predicted that many of these fixed mortgages will be coming to an end, just in time for the GE. And then what ?
People are ‘just’ scrapping by and there is a clear lag between government policy and outcome – ie the slowing of the economy, which I imagine is the plan, although Jeremy Hunt MP statements on wanting a mini-recession feel me with dread.
We need far fewer wannabe King Cnut’s of this world thinking that they have divine power over market forces. Classic trash-and-run politics.
May 30, 2023
In similar vein; this review if only half of the story.
Who was it selling the Gilts, who was it spending all that money on bad policy decisions, who was it that promoted an incompetent governor, who is still talking up interest rates.
Sir J. Your party will be reduced to a rump in the next election, probably as we enter depression.
May 30, 2023
Exactly, Peter. And four of the 9 members of the committee SJR mentions are government appointees. If they were not doing what the government wants, they would surely be replaced.
May 30, 2023
So Truss was blamed for the turmoil in the bond market, nothing to do with the BoE dumping billions of pounds of gilts onto the market.
Who will Bailley blame now it’s happened again after doing the same stupid move.
Surely it’s down to Boris or the Downing St cat.
Nothing at all to do with the idiots on Threadneedle St.
May 30, 2023
We still haven’t received information as to how much electricity we have imported through the interconnectors. Today and for most of this month we have been Importing around 24% of demand. That equates to many times the 11 terrawatt hours we have exported.
May 30, 2023
Why didn’t the Tory MPs back Liz …the memberships choice
May 30, 2023
reply to glen.
‘Why didnât the Tory MPs back Liz âŠthe memberships choice?’
Well, a majority of Tory members are Conservatives old school. They want Conservatives elected. A quick impression of the MPs are that at least half got nominated by falsehood, will vote according to orders (ie sheep), are short-term careerists, pretend to be semi-socialist whilst working hard on cultivating friends for the future. Does that help?
May 30, 2023
reply to M.T.
‘Yes that helps’
May 30, 2023
He’s blaming the supermarkets now.
May 30, 2023
@Peter Wood ‘who was it spending all that money’ this Conservative Goverrnment on behalf of the Taxpayer they are the ‘manager’ of the money they have taken under false pretences
May 30, 2023
Meanwhile, The Daily Telegraph has a piece by Sherelle Jacobs outlining how British politicians have completely âlost the plotâ and meekly go along with the prevailing status quo as we sink further into the mire.
She calls it âchronic issue avoidanceâ. It afflicts all the major parties.
May 30, 2023
A broken compass 180 degree out on almost every single issue – energy, education, policing, crime, the NHS, immigration policy, tax levels, the woke lunacy, the currency debasement QE agenda, the worthless degreesâŠ
May 30, 2023
Yes, except it’s not Andrew Bailey who is taking the blame; it is Sunaks skidâor a botched job by Hunt. I don’t know who is allowing this of the two of them
May 30, 2023
More than that. Why are they doing the exact opposite of what should be done? They want a recession etc. But why? Do we have a nudge unit moment of “we’re better off in the EU coming up???”. Increasing taxes, refusing to cut Government waste and welfare? Importing minimum wage workers and families at immediate taxpayers expense. Madness. Increases in GDP don’t make us richer, GDP per capita does with efficiency savings. All self inflicted and obvious errors. They are setting us up for more lies, like mass immigration is too high. No shit Sherlock………….. but who agreed to allow 1.2 million in every year. YOUR GOVERNMENT!
May 30, 2023
The buck stops with all the Conservative MPs. The MPs canât all keep turning a blind eye to the forced bank errors it canât only be John that is economically literate can it?
May 30, 2023
I fear it is only Sir John and JRM who are economically literate. The others seem to think it not their place to criticise the mighty Bank of England. This is only part of the price we pay for MPs not having “second jobs”.
May 30, 2023
The digital pound. It’s not a flight of fancy, it in the final stages at the Bank of England.
All your financial affairs in one convenient ( for the government ) spot, even John Redwood admits the Bank of England is not independent. So that means all you financial affairs under the scrutiny of the civil service and politicians.
Odd, don’t you think that the British ( Tory ) government has come up with a proposal that could have been copied right out of Claus Schwab’s book, The Great reset ?
May 31, 2023
Yes, APL, and how odd that they were – coincidentally of course – both using the ‘Build Back Better’ slogan as a response to the Covid crisis!
May 30, 2023
If only we had more King Canutes. He taught his courtiers the folly of flattery by sitting down by the seaside and letting the tide come in to cover his feet.
May 30, 2023
It would seem that the country has been inflicted with people in high positions of responsibility are nothing short of incompetent, to make matters worse they do not learn from past failures.
Hardly anyone talks let alone addresses the massive waste in government.
To aÄd to our problems the opposition want to stop North Sea exploration. The rate we are going these big companies will just up and relocate in a tax friendly country and the treasury will lose even more revenue.
The steadily reducing numbers of tax payer still remains firmly between the rocks and a hard place.
May 30, 2023
Indeed the voters want cheap reliable on demand energy, far lower taxes, less government, competent public services, sound money, far less low skilled migration, for less regulation, more houses, decent roads, public services that are actually half competent… yet the Tories, Labour, SNP, Libdims are pushing the complete opposite. Occasionally lying that they are not doing shortly before elections – none are to be trusted an inch.
At the current point in the cycle the Tories seem to have given up on winning and are taking what they can still loot before leaving a complete mess for Labour/Libdim/SNP it seems.
May 30, 2023
In the Telegraph – Labour faces calls to return ÂŁ1.5m donation from major backer of Just Stop Oil
Keir Starmer continues to take money from Dale Vince, founder of Ecotricity, despite UK entering the fifth week of disruption.
So what drives this economic and environmental net zero insanity? Follow the money it seems. The Tories are almost as bad if you look at their declared vested interests. It this why the police are clearly mainly on the side of the road blockers rather than those trying to get to work to pay their rents, mortgages, feed the family & pay their taxes to fund the police etc?
May 30, 2023
LL. +1
May 30, 2023
Perhaps I am too cynical – but usually I find I am not cynical enough.
Remember the Labour aid tweet of “good day to bury bad news” email on 9/11!
May 30, 2023
Yes, but that now applies to all political parties. The majority of MPâs now are liars, spinning their fairy tales before election, only to drop them when they get in!
May 30, 2023
Indeed Cameron claimed to be a cast iron, low tax at hears, EU Skeptic who would deliver the section 50 notice to leave the EU the day after the referendum and promised to stay on to deliver Brexit!
Quite a lot of blatant lies Dave!
May 30, 2023
If ever a Board of Management needed to be replaced itâs the one we currently have at the Bank of England.
May 30, 2023
That board is so bad even its woodworm take sandwiches.
May 30, 2023
And the current Cabinet and the fools at Nos 10 & 11.
May 30, 2023
The Age of Incompetence.
May 30, 2023
And the current Cabinet ….Shouldn’t let them get away with it.
May 30, 2023
If the BoE punched holes in UK banknotes to show the decrease in values more of the public would realise, but if the public did that to raise awareness it would be illegal. The BoE doesnât have to wait to switch to better practice. One wonders whether the portrait of King Charles in future issues should be smiling, grim faced or scowling at what it represents.
May 30, 2023
But King Charles with his absurd Net Zero war on CO2 plant food agenda (for you not for himself of course) is much to blame for the inflation. The recent three extra royal bank holidays have not helped either.
May 30, 2023
Our King’s answer was to reduce the heating in one swimming pool used by staff.
May 30, 2023
12th century thinking
May 30, 2023
Was it a staff pool? So rather typical, doubtless the staff will find a way circumvent this or to retaliate in some way. Staff usually do!
May 30, 2023
leave unmentionables in it?
May 30, 2023
Does Mr Redwood endorse Bailey’s plan for the digitalisation of our cash which in effect will signal the end of liberty and the start of 24-7 State totalitarianism, monitoring and control
Just wondering like because I know how much the Tory party have a penchant for two-faced backstabbing the people, saying one thing and doing the opposite
I’m looking to the day that Tory MPs try to buy a petrol car with their money and Bailey’s bank refuses to authorise the payment in the name of halting ‘climate change’
Mr Redwood’s silence in this fundamental issue is VERY TELLING
If this sinister shit comes into being it will trigger a popular revolt that will make East Germany 1989 look like a monkey’s tea party
Reply I do not support changes to end cash or give banks rights to block our use of our own money!
May 30, 2023
“block our use of our own money” that’s a joke. I can take my money and gamble it away at a casino but your government doesn’t allow me to give it away to my own family:
In general, gifts to children and grandchildren are tax-free if:
You hand out less than ÂŁ3,000 total in a tax year.
The gifts are small (less than ÂŁ250 per person).
You give a certain amount of money on the occasion of a wedding.
You gift the money more than seven years before you die.
Otherwise, money you directly give to anyone other than your spouse or a charity is subject to gift tax, which can be up to 40%.
SO, I don’t have control of MY own money now – do I?
May 30, 2023
Christine
You are correct we do not have full control of our own money.
The reason you cannot give your own money away is because the government wish to take much of it for themselves with Inheritance tax.
Even if you give it away and then die before the seven years are up, whoever you give it to will be liable for some tax, even if they have spent it on taxable goods/services, or used it as a deposit on a house.
May 30, 2023
Well other exemptions like shares in unlisted trading companies, farm land, some trading AIM shares… though they might well change the rules after your tax planning. Like playing chess but the government keep changing the rules to waste your money.
The best way is often to gift the money to children and live for the seven years (you can usually take life cover fairly cheaply to cover the tax liability should you not survive the 7 years unless you are seriously ill or very old). If you are then the trading companies work after two years (I think it still is). Also gifts between husband and wife or legal partners are exempt. So you can gift to the partner with the better life expectancy first.
But yes even after paying all your income taxes/NI it is still not really your money to spend as you wish under the absurdly punitive and damaging UK tax system.
Invest ÂŁ1million for 20 years with no tax and a 10% PA return leaves you ÂŁ6.7 million the same thing with UK taxes and 40% IHT leaves you 1.9 million. The Government has taken 85% of your investment return. You (or rather your beneficiaries) get just 16% of your return. Why live in the UK unless you like spending time and money with accountants and tax planners?
May 30, 2023
Yes, there may be options to avoid the government stealing my hard-earned money but it shouldnât be this way. We all know politicians like Starmer game the system with their bespoke pension rules but the rest of us donât have this luxury. Iâve worked very hard all my life to build up sufficient capital for a nice retirement and not be a burden on the state. I donât know when Iâve only got seven years left and I shouldnât have to be thinking of giving away whatâs mine to avoid Inheritance Tax when Iâve already paid large amounts of tax on the money already.
May 30, 2023
Nonsense, you can give whatever you want -ÂŁ100k if you can afford it.
Just ensure you gift when you are young enough to survive 7 years.
May 30, 2023
Thutch
Not true if you are property rich but cash poor, you cannot give away your house and continue to live in it, as that is a gift with reservation, you would thus need to pay a commercial rent (if you can afford it) to those to whom you have gifted it or part of it, and they will then have to pay tax at their accumulative tax rate on that rent.
May 30, 2023
famous old jewish joke(?) I couldn’t find author…
‘living is expensive, but dying you cannot afford’
May 30, 2023
Also regular gifts out of normal surplus âincomeâ over these limited are allowed – unless they have closed that one recently.
May 30, 2023
Exactly. Socialism at its worst. This Government, a former conservative one, have been the worst and most disingenuous in history and they think we can’t see through them.
May 30, 2023
Actually we need the failed ruling classes to be held to account across the board. Ineptitude wherever we look is allowed/not commented on because itâs like a âMasonicâ circle.
Your informed pieces are wasted when you have a Chancellor obviously out of his economic depth and people in the Treasury and BOE frankly âuselessâ.
May 30, 2023
Indeed as it the previous Chancellor Sunak who caused all the inflation with his lockdown and money printing.
May 30, 2023
“Dearer and scarcer mortgages also means fewer new homes will be built, exacerbating our homes shortage. Itâs the last thing we need now.”
NO, it’s the one silver lining on this particular cloud that tightening money actually INCREASES its value versus splurging it away on poorly built hutches. What’s so appealing about concreting the country over to accommodate newcomers which most folk don’t want?
Not that it will stop these idiots in government now from chucking money at developers now they’re starting to squeal.
May 30, 2023
Agree 100%
Huge lowering ânew townsâ tacked onto villages.
Utterly sickening and disgusting. Vile, inhuman and nakedly greedy.
Houses with no chimneys and gardens too small for a vegetable plot.
Ah wellâŠwhat can you expect from a breed govt. that irrevocably rips up rail tracks and tears down borders?
May 30, 2023
** breed OF govt.
May 30, 2023
Clearing the country of the millions of criminal immigrants (see headlines today) is MUCH cheaper and quicker than building these âlittle boxesâ that nobody in their right mind would buy – but have to!
May 30, 2023
Lynn
Makes sense, would also probably raise wages in some areas for some jobs, but prices then also rise a little, but may save the government some benefit payments if those on benefits took the higher paid jobs.
As I have said many times before we do not have a housing crisis in this Country we have a population crisis.
May 30, 2023
I completely agree with your analysis of the Bank of England’s ineptitude but who, in government, is listening to you? Is anyone prepared to challenge Sunak, Hunt or Bailey loudly and clearly enough to be heard by the voting public?
May 30, 2023
Please stop asking these tricky questions
May 30, 2023
“This erratically destructive policy if pursued too far will lurch us from too much inflation into recession. ”
That would be the recession Jeremy Hunt, Chancellor, said a few days ago we “may need” to get inflation down (ie so Sunak can claim to have met one of his 5 targets – reducing inflation in half).
Never mind the cost to the economy, or the misery it will mean for “the peasants.” Yet they’ll still claim the B of E is independent!
Still ….. it will add to the scorched earth policy they’re bequeathing Starmer and Reeves.
May 30, 2023
Itâs strange isnât it. Read any article by an economist, listen to an interview with an economist, read JRâs opinions⊠why does the B of E and the Treasury appear to do the opposite of everyone elseâs ideas?
Are they truly that stupid to get things so wrong, so often? More importantly, why havenât they been replaced with people who know what theyâre doing?
Maybe like Sunak, according to Neil Oliver, they get their daily instructions from elsewhere?
May 30, 2023
Calculated economic depression…
May 30, 2023
Sharon
I think Neil Oliver is bang on the money.
The infiltration appears is everywhere and deep routed.
May 30, 2023
There may be method in their madness. The collapse of smaller banks in the US is caused by the rising of interest rates and consequent devaluing of bonds. The valuation of banks has been analyzed by an independent economist and taking into account the real value of assets, they are worthless. These banks are then handed to the larger ‘too big to fail’ banks for a small sum and these discard the dodgy parts which are saved using taxpayer’s money. The banks under threat are the ones which have been serving crypto currency, which central banks wish to close and remove competition. This clears the way for Central Bank Digital Currency, which will be sold as a stabilizing new fix. It will also lead to total control by the banks, which of course are members of the WEF/KC3/UN/IMF etc.
When Hunt says he likes recession and high interest rates, this suits the banks because they are cleaning up the SMEs going bust. Lloyds is already buying up buy to let properties which small landlords are being forced to sell. The occupants of No 10 and 11 were chosen by the biggest finance groups and the IMF to see through their agendas.
May 30, 2023
https://www.independent.co.uk/business/lloyds-bank-aims-to-be-uk-s-biggest-private-landlord-by-2025-b1905081.html
May 30, 2023
“We need to grow more of our own food” Then why are your government’s policies to achieve Net Zero cutting food production which will reduce supply and increase costs?
May 30, 2023
If we are to grow more of our own food, then farmworkers need to be able to afford a place to live, and not be outcompeted by wealthy second home buyers, the holiday cottage industry and foreign investors.
May 30, 2023
Afford a place to live when they’re deliberately lying and importing 1.2 million a year whilst promising to reduce it to the 10’s of thousands. Who’d trust a Tory ………..ever again. How many years does it take them to deport illegals? But a millisecond to raise taxes to pay for them.
May 30, 2023
@Christine – This Conservative Government has a policy of punishing all indigenous producers. The farming Community it would seem now get more handouts for re-wilding.
May 30, 2023
Considering most farmers lease their farm from the gentry, its the rich who are benefiting from this waste of OUR money.
I foresee an uprising coming over the horizon!
May 30, 2023
Dearer mortgages will lead to many more landlords selling up as they will no longer qualify for renewed loans. This will cause shrinkage in the rental market. Where are all these people going to live as your government continues to flood the country with more and more immigrants? We are at breaking point now and it is set to get much worse. Rather than deal with a crisis, look ahead and avert it.
May 30, 2023
It is unclear to me what role the Treasury Select Committee fulfils. Should it not be arguing your case for you and holding the Treasury, Andrew Bailey, the Chancellor and even the OBR to account? If not then what has gone wrong that you have to continually repeat the same good advice. Is the Treasury Select Committee not listening to you and if not why not?
Reply I have sent them my lecture argument
May 30, 2023
You have said it all, but I can add this pearl of wisdom:
âBurn down your cities and leave our farms, and your cities will spring up again as if by magic; but destroy our farms and the grass will grow in the streets of every city in the land (William Jennings Bryan, 9 July 1896).
May 30, 2023
Well said LYNN!
May 30, 2023
I am certain that JR has seen or read Mary Poppins.
Could he not do similar?
Briefcase and Brolly.
March along to BoE ( I think she flew with the help of her brolly),
Bustle in andâŠ.
SORT THEM OUT!
May 30, 2023
Have all govt. bodies relied on computer models for years now?
Causing this sort of catastrophe.
Absolutely intent on proving that AI could work ( not)?
It would explain the dogged ruts politicians get stuck in.
And it fits in with all notions of post-democracy.
ieâŠno politicians.
I mean there is a plethora of books and articles that the BoE could have consulted since it obviously has not a single scoobieâŠ..
May 30, 2023
Which is worse, speculating on the love life of an ex ITV presenter or an equal example of debatable financial chaos such as the BoE.
Everything involving government is in a shambolic state, but worse, there is no sign that anyone in supposed charge realises this. You were on about potholes in Wokingham yesterday. Let me assure you it is not unique to Wokingham. It is the acne of all our roads throughout the UK.
Write and tell us of anything that works as it should in the UK outside the military, but even this has been screwed to relative insignificance by your fellow politicians.
May 30, 2023
The list of incompetent decisions, policies, and management just seems to grow day by day.
At the moment I do not see much hope for the future of the UK at all, no matter which Party is in so called power.
The big blob seems to be winning on almost every count.
May 30, 2023
The operative word in today’s piece being “lurch” – for instance a boat that is unstable might lurch from one side to the other even in good weather meaning that there is something seriously wrong that needs attention but if the captain doesn’t know what he’s about and in a situation like this then heaven help – same thing in any walk of life.
May 30, 2023
Sir John
I take issue with the premise that something can be considered âindependentâ while it at the same time needs Taxpayer bailouts/subsidies/grants to exist.
The Government, this Conservative Government is the custodian of all Taxpayer money it collects. Therefore it is the Guardian and Management of it on behalf of those it collects it from â the taxpayer
Its a mealy mouthed political speak âa get outâ to then call something âindependentâ in those instances. It is clear this Conservative Government as the manager of everything it spends, has lost control, doesnât know or is refusing its obligations. It is the Conservative Government that is the fault line in its refusal to manage.
May 30, 2023
Sir John
You say âgovernment bonds they ownâ. Can I ask who paid for them?
It doesnât seem as if its the BoE paying, its not this Conservative Government(Governments donât have money, just access to our wallets)
So reasonable question who is the loser when this type of Bond is sold at a loss?
Reply The Bank created money to buy them. Taxpayers pay the losses
May 30, 2023
The BoE may well have run QE for too long, but the primary cause of the current inflation is the increase in input costs caused by big oil ramping up the price of their products in 2020 – prior to the Russian invasion of Ukraine.
The fossil fuel lobby is terrified, as the word moves to electric vehicles. They increased the price of gas fourfold which ramped up the price of electricity – and hence the economics of charging an EV.
Those dinosaurs who post here and believe the fossil fuel lobby’s crap should watch the excellent BBC 3-part documentary “Big Oil v The World.” This shocking series reveals the lies oil lobbyists told to undercut democracy, prevent action against global heating â and bring our planet to the brink
Reply Most of my constituents heat their homes with gas and drive ICE vehicles. we still need oil and gas to live. Your food is delivered by diesel lorry to your supermarket.
May 30, 2023
Am I to take it SG that you are living ‘off-grid’ and that your connection to the internet is completely powered by renewable energy ?
Like so many on the Climate Scam side you are just another hypocrite.
May 30, 2023
@Sir John.
Of course we will still need gas and diesel during the transition to clean energy, but we have wasted much time. The fossil fuel industry did not act upon the conclusions that their own scientists had come to 40 years ago about the direct causal link between CO2 emissions/methane leakage and global heating. Instead, they cast doubt upon their scientists’ results, saying it was “inconclusive” and commenced planting pro-fossil fuel propaganda into world media. And anti-renewables lies and false data, when we could have solved the problem.
May 30, 2023
SG
Over 85% of the world’s energy needs still comes from gas oil and coal.
Tens of thousands of essential products derive from fossil fuels.
How will you substitute “clean energy ” to make them?
How for example will you make steel, smelt aluminium, power aircraft, power world shipping or big heavy goods vehicles on “clean energy”
We are now abandoning even nuclear power which is the current best clean energy technology.
But I expect you are opposed to utilising nuclear power.
May 31, 2023
@ Martin in Bristol
We have to start somewhere. The point that I was making was that big oil ignored their own scientists research 40 years ago and lied to the world about it. 35% of the worlds electricity now comes from low-carbon sources, this is increasing by 3.5% each year and we are building new nuclear. Big oil knows that once a certain mass of EVs are on the roads we have a grid-scale electricity storage system, which they know is an existential threat to their business model.
Reply The UK and France are building less nuclear than they are closing. No sign of major grid expansion. Gas and oil still our dominant sources of energy.
May 31, 2023
SG
My point is that electricity, be it from low CO2 sources or not, is only one part of the much larger total global energy requirement.
May 31, 2023
SG : “This shocking series reveals the lies oil lobbyists told to undercut democracy, prevent action against global heating â and bring our planet to the brink”
I’m afraid you’ve fallen for the BBC’s lies. There is no climate breakdown/emergency/crisis caused by anthropogenic CO2 emissions. By burning fossil fuels we are in fact returning back into the atmosphere much needed CO2 (for plant growth) which has become locked up in the millions of billions of tons of carbonaceous rocks formed by shelled marine animals over millions of years and if this depletion of atmospheric CO2 is allowed to continue with the Net Zero lunacy it would eventually reduce atmospheric CO2 to a level below which plants, and hence all life on earth, cannot survive.
May 30, 2023
I donât understand why SirJ or any Tory MP is arguing for lower inflation & higher growth; you got rid of Liz and abandoned those policies. Instead the parliamentary party members choose high inflation & lower growth, high subsidy net-zero, high immigration âŠ.everyone inside and outside of politics understood the policies that Sunak & Hunt would introduce âŠYour Tory party isnât Tory anymore
May 30, 2023
Itâs not inflation itâs switching to NetZero energy sources.
Once the price of everything has doubled then inflation will stop. The awkward but will be having to explain to voters why everything is half the price in the rest of the world.
The answer will be – remember you are reducing the temperature by 0.002 degrees over the next 50 years as we sit there in 3 jumpers shivering to death.
May 30, 2023
I like your last sentence …powerful statement but true
May 30, 2023
Also you don’t need to watch the BBC weather reports …its almost summer its going to be ‘hot’
May 30, 2023
UK meteorologists will tell you the weather tomorrow will be basically same as today.
To appear clever the trick is to watch for change approaching ‘on the horizon’.
May 30, 2023
You won’t be shivering, you’ll be a dead stiff! Literally.
May 30, 2023
I know nothing about bonds at all, so will say nothing.
But why do we need so many more houses? The white British population is actually falling with less than two children per child. In theory, therefore, therefore should be a glut of houses.
Why?
If you stand outside your door and offer free food to people, they will come from all over the world. If you do the same with education and, above all, free health, then they will come as well. Many people are very scared to walk down the street in their own country and they face a jobless and uneducated future there. All free here in UK.
But for how much longer?
Dr North today gives the prison stats. Horrifying.
May 30, 2023
Kindly explain to us why Andrew Bailey has not been sacked.
May 30, 2023
Depending on his terms of engagement, I suspect that he has done nothing wrong to warrant being dismissed. If inflation goes above 2%, all he has to do is pen a letter to explain why – Job done !!
May 30, 2023
Also why the Chancellor responsible for all the money printing and general incompetence was promoted to PM?
May 30, 2023
But, as you have said many times, the Bank’s policy is dependant on the approval of the Government, which it clearly has or that policy would be changed, and all the things you, quite rightly, rail against in your final paragraph are also, as far as I know, defined Government policy. I am beginning to find it very difficult to understand how you can continue to accept the Government party whip.
May 30, 2023
Why is it that a bunch of experts can be so wrong? Either they are not expert, meaning their qualifications are worthless and they have learned little or nothing from the experience of themselves and others, or they know what they are doing and intend to wreck the economy. Either way they should be fired.
May 30, 2023
Selling Government long dated Bonds at a loss long before it is appropriate or needed.
To whom? Friends of friends?
Who really is making money from the deal?
The Great Taxpayer giveaway orchestrated by the monies collectore custodian and manager âthe Conservative Governmentâ You couldn’t make up, it wouldn’t happen in a Democracy
May 30, 2023
I would imagine the same people who made a mint from Gordon Brown selling all our gold at rock bottom ?
May 30, 2023
Absolute madness!
Why don’t they just try to stabilise the market, and leave Gilts roll over into the longer term?
———————————————————————————————————————————————-
“endorse Baileyâs plan for the digitisation of our cash”
Are you not confusing centralised digitisation of cash, and a distributed digitisation model of ‘Value’!
e.g Bitcoin is meant to be based on a distributed model (Always check before you buy).
I don’t buy, so I don’t know!
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One thing that is now obvious! They are frighten because
1) Net Zero does not work, and other country’s (blocks) are not buying into it, in the same way we are! ?
2) Carbon Pricing only works for the Energy Rich, the Powerful blocks, and/or both (USA)?
3) Green Subsidies are now distorting the energy market?
4) Their attempt at Marxist controls; A structured market and a non flexible Price Mechanism; e.g Universal Credit (wages subsidies for big company’s as in a customs union), National Income (Price Floor), Tax credits, Rent controls, etc,… Are all out dated!
5) Alignment to a deflating block (especially Germany)?
I think you get the idea;
The point is the next GE!
If Sunak (Hunt) thinks, someone like me, will be forced into accepting, and then voting Conservative, just to keep Labour out, with this mess, he is mistaken!
We NEED a Conservative Party, even if you have to put yourself forward as a potential Chancellor!
Not that I accept not building houses, the Conservative Party promised 300,000 per year, do what you promised!
Even, if it has to be done centrally!
Regards,
RDM.
May 30, 2023
Gets my vote
May 30, 2023
Parliament and the Bank, it seems are working in tandem to ruin the UK economy in any possible way.
Gordon Brown – just prior to becoming Chancellor, announced he would be selling tons of our gold – giving notice so that the value could go down, and yes, we lost a tidy fortune thanks to that.
Both acts are deliberate – they can’t be anything but, designed to inflict huge losses on the UK….and we can’t expect Parliament to do anything about it!
May 30, 2023
Why is 10 Downing St. so ineffective in economic affairs ?. It allows the BoE to make decisions that does enormous harm to the lives of individuals and businesses ; investors are driven away and voters have had enough . In my long life I have never known such a mess . There are voices of influence that should force change in the mind and actions of Sunak .
May 30, 2023
Why? well take a look at the residents.
May 30, 2023
I go back to the comment I posted a few days ago, which ended:
http://johnredwoodsdiary.com/2023/05/27/the-bank-and-recession/#comment-1390286
“According to Alistair Darlingâs first letter the Asset Purchase Facility was to be a temporary measure during a period of instability and so there should be no exchange of letters about it 14 years later, yet here we are with Jeremy Hunt agreeing with what the Governor now plans to do to unwind it, following âinstructionsâ from the Monetary Policy Committee:
âIn accordance with our longstanding agreement, the scale, pace and nature of APF unwind is chosen solely to meet the MPCâs policy objectives.â
and confirming that the Treasury will continue to indemnify the Bank against any losses.”
Ostensibly the MPC is determining the actions of the Bank, but who determines the MPC’s “policy objectives”?
The Chancellor, as confirmed in the most recent remit letter of November 17 2022 that I mentioned here:
http://johnredwoodsdiary.com/2022/11/17/my-speech-at-the-opposition-day-motion-on-britains-industrial-future/#comment-1355835
When I concluded what I still think now:
“It makes no sense to me for the government to say that most of the inflation is down to external factors but the committee should continue to aim for the 2% target and mechanistically put up UK interest rates to suppress it.”
As I had written ten days earlier:
http://johnredwoodsdiary.com/2022/11/07/the-uk-economy-has-been-let-down-by-the-bank-of-england-not-by-brexit/#comment-1353514
“It would only need a fresh remit letter from the Chancellor to the Governor to suspend the usual 2% inflation target and so induce the MPC to moderate the increases in base rate.”
And back in August 2022:
http://johnredwoodsdiary.com/2022/08/23/my-conservative-home-article-2/#comment-1336748
“My mind is going back thirty years to the ERM crisis. Then the stupid decision had been to lock sterling against the German mark, come what may. Now it seems the stupid decision is to keep to the 2% inflation target, come what may, even if the UK is importing inflation at levels which are much higher than that and completely beyond the control of the UK monetary and fiscal authorities. During Black Wednesday, September 16 1992, the Bank announced that the base interest rate would be increased to 15% to try to stem the flight from sterling. Luckily that did not work and by the evening we were freed from the ERM and immediately set on the road to economic recovery. So how high do we now expect the Bank to raise interest rates in a futile attempt to bring down UK inflation to this arbitrary 2% target, how many firms would we be willing to see wiped out, and how many people would we be content to see joining the dole queue, losing their homes and often their families as well?”
May 30, 2023
I queried on here (sorry I do no have a link) why do we have a 2% target, or any target at all ?
The interest rates rises are not just related to domestic inflation but, to US Fed’ rate increases. The US Fed’ can raise interest much easier as most US mortgages are locked in for very much longer terms that UK ones. I mentioned previously that although UK mortgages are locked in, the terms are usually shorter so the effects rise will not be seen until much later.
One saving grace for the UK housing market, is the majority of homes which are privately owned do not have mortgages so we should see a less pronounced crash. But prices are defiantly beginning to fall.
May 30, 2023
A current political precis.
If it grunts, creates mass effluent, digs up worms and acorns with it’s nose, logically it’s a pig.
If it consigns NI to the EU, taxes us to a grotesque level, does not nurture enterprise, overwhelms the UK with immigrants legal and illegal, trashes our energy self sufficiency and as a consequence exports our energy dependant industries, leaves us tied to left over EU law, and now wishes for a European Defence Force when we already belong to a most effective one called NATO. This latter move would re-engage us with EU law and financial committment. The very latest is to tie us legally to carry out WHO dictats in some form of international agreement to cover world pandemics. We proved during Covid that on balance we did better than most, though not all in every respect.
The question is, if it acts like a socialist, regrets Brexit and wishes to tie us back into an alien law system, and does everything it can to reduce us to serfdom at home. For gold plated certainty it is not Conservative, nor does it believe in UK sovereignty. Currently it is a socialist remainer in waiting government, parachuted into power by a Blob conceived undemocratic coupe , supposedly intent on a globalist solution to all conceived ills.
Further it is unduely tolerant of obscure pressure groups like Just Stop Oil, Extinsion Rebellion, Black Lives Matter et al. This suggests to me that government is supportive as it suits their ultimate agenda. Labour is supportive having just announced that in power it will cease support for any further North Sea developement. Civilisation is often responsible for it’s own decline, however this self destruction is usually assisted.
What can you do about it SJR. Little is achieved by letters to minister bar showing us their indifference. You explain the financial world with clarity, and promote Brexit to all who can read and listen. The current conservative party has gone way beyond it’s tipping point with the electorate, who must be be sensing their disenfranchisement. Who can they possibly vote for.
At present below the parapet, but very Conservative is Reform. If an astute Ann Widdicombe can see the political climate change I am sure you can. At the appropriate point in time, were you and a large part of the ERG to switch allegencies it might create the political earthquake needed to keep true Conservatism alive. A service to the nation, after which the real fight begins because the Blob does not die with election results.
May 30, 2023
Can’t Jeremy Hunt and your government stop the BoE?
Who are the beneficiaries of the buying up of these bonds at pre-alerted discounts? Is it all rather like Brown announcing he was selling gold, and your party condemned him for that? So why not stop the bank making these pronouncements? It’s almost like they’re in cahoots to get rid of your party in a drubbing on purpose with the backing of Rishi and Hunt (they need to prove otherwise now).
May 30, 2023
Another thing they want to stop throwing our money at is the farce in the belief by politicians the Heat pumps are the panacea to all their Net Zero problems.
The inconvenient truth about heat pumps
Ruth Bloomfield in The Spectator just about slays the myth with an excellent article.
https://www.spectator.co.uk/article/the-inconvenient-truth-about-heat-pumps/
If only the people entrusted with managing our money would just STOP. Rethink and come up with another common sense option instead of throwing snowballs at the moon with all this NZ madness. It surely must be adding to the problems with the big picture of money management. We haven’t yet been told what the full cost of the venture will be ffs, so some people are extracting the urine. Nothing breeds failure faster than uncertainty, perception of lack of belief, truth, and vision in the minds of potential customers.
May 30, 2023
Thanks for the link to that article.
May 30, 2023
Along with Sir Johnâs tweet on free speech, there is also âDavid Davis: The right to demonstrate includes the right to disruptâ, New Statesman, 27/05/2023.
May 30, 2023
John, please tell us how we, the public, can help UK inflation for ourselves in June.
Buying more British-made sausages?
Buying UK milk and butter, yoghurt and cheese?
Rishi was talking about price caps, but when I ask people how much certain items are, they often don’t know what they’re paying.
What is a good price for:
Fresh Best Pork Sausages 410g x 8 price range today ÂŁ1.50 (Sainsburys Stamford St) to ÂŁ3.50 avg (although you can get Irish for ÂŁ1.29 Aldi)
Fresh Semi Skimmed Milk 4pts (2.27L) ÂŁ1.55 or Organic ÂŁ2
Mature UK Cheese from 70p per 100g at Aldi to 82p per 100g Cathedral City made in Cornwall with British milk.
Free Range Medium eggs x 6 (x12) M&S ÂŁ1.25 Scottish Eggs from barn hens x 15 ÂŁ1.99 Aldi
loaf of sandwich bread, 16p per 100g (inc Hovis) -25p
slightly salted butter 500g ÂŁ3.75 [250g typically costs ÂŁ1.89 at Ocado ÂŁ2.19 to ÂŁ2.70]
6 apples seasonal Waitrose ÂŁ2 Granny Smiths ÂŁ1.75, Gala ÂŁ0.99
What do the ONS say they cost to get their food inflation figure? What are we importing from Europe that will go up? Can’t we prepare now? I read we import most of the pasta we consume; if that is likely to go up, then what preparations have we made? We could make pasta in the UK.
May 30, 2023
I’ve just read an article at lunch about a sandwich manufacturer that supplies most UK outlets, from supermarkets to cafe chains based in DUBLIN. Does this mean that their profits from a ÂŁ1.7bn turnover, most of which is from products which will be sold in the UK, will be paid in Rep of Ireland rather than the UK? We are absolute mugs in the UK. I wonder what % of their ingredients are imported from the EU rather than British ingredients. I also wonder how much they make and sell in France as they seem to protect their boulangeries and ask them to cap the cost of their basic bread to reward national loyalty.
May 30, 2023
lesechos.fr 20/09/2022 âLe prix du pain a moins augmente en France que chez nos voisins europĂ©ensâ. Price of bread went up by +18% in the EU, +8.2% in France. And âla baguetteâ (70% of the bread bought in France) only went up by 5% whereas fancy breads went up by 10+%.
From what I know of France, pre-manufactured sandwiches are much less common for lunch there than in the UK: my guess is that the Dublin sandwich manufacturer does not make that much from French customers.
Given that local independent boulangeries are still easy to find in France (there are still more than 33,000 of them), and bread from such a place is usually much better than what is available from French supermarkets (themselves providing bread at least twice as good as what is supposed to be âbaguettesâ in British supermarkets) I donât think there is much need for the French government to âprotectâ this particular retail sector. The only âprotectionâ the sector appears to have recently received is the possibility for bakers to defer the payment for their taxes and social contributions to help with the soaring cost of energy (Le Monde, 04/01/2023, âLe gouvernement tente de contenir la facture dâelectricite des boulangersâ).
But really, do you see France as a potential export market for British bread?
May 31, 2023
hefner
Agree bread in France far superior in taste to the mass produced stuff we call bread here.
Only problem is you need to purchase bread every day, as it does not keep well, not a problem in France with freshly baked bread available from a local source (very often family owned)
Agree, the French people do not tend to purchase ready made sandwiches, unless absolutely nothing else is available.
a-tracy
Companies tend to set up in Ireland simply because of the lower tax rates that apply, seems our present Whilst many of us out here understand that situation, it seems the the Chancellor does not !
May 31, 2023
Hefner, Actually, I’m not too fond of French baguettes; often, the crispy ones hurt the inside of my mouth when I eat them from boulangeries on my visits there. On the other hand, their straight croissants (which the law controls) and crepes are delicious. I read their government reduced boulangeries electricity bills by 20%, not just deferment. Did our government support British bakers impacted by their rising energy prices?
I rarely buy ready-made sandwiches. I can’t understand why people can’t just make their own butties. Visitors always seem to enjoy English Afternoon Tea, there is a big market for them in London, too often the sandwiches use sliced bread (that is too thick for me). Perhaps our British bread manufacturers should try to get into their supermarkets and do taster tables of sandwiches to show French Mums how much they could save on their children’s lunch boxes, or would they be stopped from selling there?
You get artisan bakers in the UK, usually in posher towns that can afford to pay their bread prices, as delicious as they are, often too expensive for most families to buy regularly.
Alan, perhaps it is up to the public to make their lunch sandwiches to help with our inflation and keep more money circulating within the UK :). They can’t be that hard up if they buy ready-made sandwiches, can they? There must be ways that we can collectively affect inflation without this Chancellor taking the Mick.
May 30, 2023
Pasta is mainly made with durum wheat, a plant growing in a Mediterranean climate. Right now it seems only one farm in Norfolk has tried to grow durum wheat in the UK.
Maybe we just have to wait a few more years and the UK will become the main pasta producer. A benefit both of Brexit and climate change âŠWhatâs not to like?
May 30, 2023
Quite, perhaps thats why prices are going so high on some European goods because theres not enough competition. What other countries are in line with that Italian region that grows it? Iâm not that bothered because I donât eat that much pasta but I hear people getting in a tizzy because the prices are going up on pasta occasionally and weâre told itâs going up a lot more from September 2023 so best start preparing now.
May 30, 2023
The problem with eggs is that the UK government would not, or could not thanks to EU competition rules, subsidies are poultry industry when feed stock hit high prices and the supermarket chains refused to absorb any increase. So we lost an industry which will take time to recover.
May 31, 2023
Why not the French subsidised their boulangerie’s energy rises.
May 30, 2023
Gerard Lyons writes In this article today:
https://conservativehome.com/2023/05/30/gerard-lyons-we-dont-need-price-controls-instead-hold-the-bank-to-account/
“The surge in inflation that we have seen in recent years has been triggered by two factors: supply side factors linked to the pandemic and then exacerbated by the War in Ukraine, and inappropriate monetary policy.”
I think it is difficult to dispute that statement, although there can certainly be arguments over just how monetary policy has been and is “inappropriate”, and what should be done about that and by whom.
May 30, 2023
This lunchtime, I read that inflation is running rife on chocolate and coffee. I couldn’t see much of those coming from the EU; then I remembered we let Cabury’s get gobbled up, 700 jobs lost in 2007, moving our jobs to Poland. 500 jobs from Bristol, 200 more jobs lost at Bourneville. This country needs to go on a sugar reduction anyway. Then I thought what chocolate is Aldi selling and at what price? Dairyfine Milk chocolate bar ÂŁ0.48 per 100g I wondered ‘Where is that made’ = Germany, their everyday essentials chocolate bar ÂŁ0.43 for 100g made in Poland, compared to Cadbury’s Dairymilk ÂŁ1.23 per 100g manuf. Birmingham/Dublin
May 30, 2023
https://www.politicshome.com/news/article/brexit-checks-risk-meat-cheese-price-surge-compounding-inflation
“New Brexit Checks Risk Meat And Cheese Prices Soaring Even Higher”
None of this makes sense to me. For thirty years after the advent of the EU Single Market we and the other EU member states allowed each others’ stuff in with little or no routine checks at the borders, each trusting that the others would uphold the common EU standards; then because we said we were leaving the EU we suddenly became untrustworthy and our exports had to be carefully checked even though we were still operating to the same standards, and the Irish land border was a huge problem because some time in the future we might allow US-style “chlorinated chicken” to pass across into the Irish Republic; now apparently we should be concerned that unless we impose heightened checks on food imports from the EU we might let in African swine fever and other diseases which were not perceived to be such a problem when we in the EU; but if the DUP want goods to be allowed to move completely freely from Northern Ireland to Great Britain, as reported here recently:
https://www.politicshome.com/news/article/northern-ireland-election-dup-power-sharing
then that would create the situation where instead of Northern Ireland being a backdoor allowing illicit goods to enter the EU Single Market it will potentially become a backdoor into our UK internal market.
May 31, 2023
Denis, a few checks on incoming refrigerated vans and fines.
Similar fines already have precedence in the EU for breaching rules and regulations, and we could then fine the EU (or the country exporting illegally) a guessed amount for infractions not just for the load identified but on the potential of how much comes over!
May 30, 2023
How much more complacency, profligacy, apathy, irresponsibility and oodles of incompetence at the top can this country take, before the Rest of the World starts to dump us and our currency and our dear old UK implodes?
May 30, 2023
Membership of the UN Net-Zero Insurance Alliance has declined from 30 to 17 companies âŠ.even international companies are starting to see the folly of net-zero âŠ.politicians need to realise that net-zero is a ââCOSTââ, a cost that pushes inflation and restricts growth & investment
May 31, 2023
The important thing is to get inflation down to zero and keep it there. Forget about this 2% nonsense. It’s clear that the Government has made a pig’s ear of the economy and the Bank of England has made a pig’s ear of monetary policy. If Messrs Sunak, Hunt and Bailey are still in post with the same agenda when we get to the General Election, I shall be voting for the Reform Party. The Conservatives have also failed on Northern Ireland, immigration and Sovereignty.
Don’t threaten me with a Labour Government. It is unlikely to be any worse.
May 31, 2023
It sounds to me Sir John that you believe the BoE is acting in the same way I believe the DES&NZ is acting.
Both are now classic examples of Robert Conquestâs 2nd and 3rd laws of politics.