I gave an interview yesterday  to Talk tv about Bank of England monetary policy.
I called for an urgent review of their economic model and forecasts. The Bank has admitted its forecasts have been wrong on inflation  for sometime but have announced a long winded review of what to do about it. If they cannot forecast inflation well it is difficult to understand how they can carry on setting rates to adjust inflation.
Their justification of a fourteenth rate hike this week was they needed to depress demand more to cut inflation further. They wish to do this by hitting the spending power of those with mortgages. It does not seem to have occurred to them that raising rates increases the spending power  of those with savings. Their current policy is creating a manufacturing and housing recession.
I called for an end to selling bonds at huge losses. They pass the bill to the Treasury and are now lurching from creating too much money to destroying too much. Letting their balance  sheet contract as the bonds repay is sufficient a squeeze.
Why does the Bank lurch from inflation to recession inducing policy yet again?
find my interview with Talk TV’s Mike Graham on You tube where we discussed the Bank of England’s forecasts and monetary policy.
You can find it between: 33:4344:23.
August 5, 2023
Good morning.
Interest rate rises also hit investment and increases the level of government borrowing.
Interest rate rises will not hit those who own their homes outright or those whose mortgages are fixed for a significant period of time.
If the BoE and the government want to tackle inflation then they need to look at one of the main drivers of it, and that is the cost of energy. It also needs to look at ULEZ and this too will increase prices as delivery companies pass on the costs to consumers.
There is, in my view, only one way to quell demand and that is through VAT which is a consumption tax. But because past and present governments have divided up both responsibility of managing the economy and the various tools needed to do so, we have a disjointed and unequal approach such as that described by our kind host.
We need to accept that the NEW Labour reforms of the past are not working and that the Chancellor needs to assume FULL control and responsibility of the economy.
August 5, 2023
Hit inflation by cutting the vast government waste and expenditure, kill the net zero religion and energy market rigging, kill the ULEZ tax, cut sales taxes like VAT, fuel, stamp and other duties, the 12% insurance tax, relax planning and cut regulation to grow the tax base and the economy, stop and deter open door migration, cancel loans for duff degrees, cancel HS2, give the people freedom and choice – Simples!
But Sunak, HuntâŠclearly have rather the opposite agenda.
August 5, 2023
Agree
August 5, 2023
JR, is the US influencing/directing the UK economy?
Or is Bailey just following their policies? Truss seemed to think Biden interfered with her demise?
August 6, 2023
I too think Bailey and Sunak and many lefty remainers probably conspired to cause the fall of Truss and Kwarteng. But perhaps I am wrong. Interest rates now higher than under Truss and no sign of any real growth. But why would there be with tax levels and government waste so high and anti-growth policies everywhere.
August 6, 2023
LL
The members voted for Liz and the Tory MPs got rid of her ? Why didn’t they support her ?
August 5, 2023
JRs party and govt are devout big state, high tax and wasteful spending. Look at their record. Highest taxation in 70 years, highest debt, highest interest on debt, Sunak and Hunt refuse to consider cutting the head count to allow people to enter private sector and thereby reduce mass immigration! I am starting to wonder why JR makes such comments and blogs when he k owns his party and govt records over 14 years!! No member of the public voted for Sunak and Hunt and their membership overwhelmingly rejected both!! Yet allowed by JR and colleagues to run the country into the ground distracting from closely aligning to EU laws, regs and directives while giving away N.Ireland!! Sunak sacked 5 MPs from a legislative committee in case they voted against his betrayal of the nation N.Ireland and GB!! Sunak can put a barrier down the Irish Sea between N.Ireland and GB but not stop, but increase mass I. It ration across English Channel while paying France record sums of our taxes!!
August 5, 2023
+many
August 5, 2023
Exactly.
PATRICK MINFORD today is spot on too. âThe Bank is compounding its mistakes
Pointless monetary and fiscal tightening will land us in a major recession and trigger a depressive doom-loopâ
Is the plan perhaps to leave as big an economic mess as possible for Starmer, SNP, LibDims? That they will doubtless make even worse.
August 5, 2023
Mark B
The incompetent Gordon Brown was the originator of the Labour “reforms”. He, of course, famously abolished “stop-go” economics (“no more boom and bust”…) but apparently failed to pass on the secret of how to do so…
August 5, 2023
@Mark B
Having energy costs applied to our industry and commerce that is more than double the price of on of the UKâs largest competitors, the US, is a Conservative Government policy by design. If the UK is able to compete it would grow its wealth, after 13 years of trick, traps and connivance the Conservatives have shown they are against that.
August 5, 2023
@Ian B
As reported in today’s Daily Telegraph
“British industry has paid a ÂŁ3.5bn premium on its energy costs under the Conservatives, Labour has claimed”
It is a strong resilient self reliant economy that keeps costs down and inflation under control. The 70 year high tax punishment dished out by the Conservative Government and the lax approach of the BoE all conspire to increase inflation and costs exponentially.
August 5, 2023
Exactly right.
When John Major destroyed the Tories for three plus terms giving Blair his 179-seat majority we had had quite sometime since his ERM fiasco (and all the businesses going bust and houses repossessed due to Major’s pointless government crated recession). The economy was finally starting to recover following the failure of his deluded ERM lunacy by the time of his massive defeat.
The currently government clearly think they can do even better and go into the election in 14 months time in the middle of all the businesses going bust and houses being repossessed. Great plan Sunak. Vote Tory we got everything wrong (lockdowns, tax levels, the size of the state, the net harm vaccines, are the party of tax, borrow, print, inflation and endless waste, the mad wars on CO2, motorists, hard workers, HS2, the rich, the self employed, landlords thus tenants… but we are not quite as bad as Starmer.
Should go well!
August 5, 2023
+1 LL
August 5, 2023
@LL – Vote Conservative and get the Labour manifesto applied in full
August 5, 2023
The UK environment secretary, ThérÚse Coffey, has ordered officials in her department to cut ties with Greenpeace indefinitely, well done but why on earth was such a deluded religious organisation given any direct involvement in government energy, environment planning?
Replace perhaps with the very sensible and scientifically sound Patrick Moore (a past president of Green Peace) who can explain how mad the Green Peace agenda now is.
August 5, 2023
If you want to know just how mad the leftâs LTN and city travel plans are then listen to Christo interviewing him about 8.05 am. A totally deluded and economically dangerous agenda of Leo Murray a past Labour advisor it seems.
August 5, 2023
Lifelogic
It is laughable (almost..) that Major now assumes the mantle of “elder statesman” entitled to be heeded on any topic he chooses to preach on.
In reality he was fairly useless and only won his General Election because the alternative was Kinnock.
August 5, 2023
Tragic and a disaster rather than amusing alas! Why on earth did the relatively sensible Mrs Thatcher appoint John Major (who even failed his maths O levels and most others as Chancellor and even let him take us into the ERM disaster. Why did the foolish MPs retain Major after his ERM farce, âno change no chanceâ as JR rightly put it.
August 5, 2023
+many
August 5, 2023
John, agree things aren’t working. Much of the inflation is the after effects of the expansion of money supply during COVID, the Net Zero war on secure GB and Western produced fossil fuels and home grown food, with a dependence on imports of essentials as supply chain shocks and shortages push prices up. With OPEC+ turning down oil supply, America not issuing more extraction licences and China’s demand set to increase again the future doesn’t look any brighter there for inflationary pressures. To top it off much of the inflation is also government tax and spend. Interest rate and tax rate rises just hurt people and businesses very hard without touching the energy, food and government spending side of inflation. It’s stupidity.
We need to drop government spending, drop taxes, drop interest rates and a complete rethink on energy and farming policies. Dump Net Zero. Secure the border and expelling invaders costing ÂŁ6m a day in housing costs would save money too.
August 5, 2023
+1 DB
Expell every migrant that arrived illegally.
August 5, 2023
Legal migration quality controls are far, far too loose too.
August 5, 2023
+1
August 5, 2023
I agree with that BOF, Britain is in the DAFT lane!
August 5, 2023
David
The effects of Covid with all of the shutdowns, both here and abroad, caused a significant shortage of a whole range of goods and products, and scarcity means immediate price increases, which remain usually until supply and demand get back into balance, unfortunately Companies have realised they can get away with those huge increases without it so far being detrimental to their businesses, and so many of those price increases have remained in place.
August 5, 2023
Annual inflation fell from 8.7% to 7.9% in a single month. At this rate, it should get down to zero in approximately one year, This suggests that the latest base rate hike, from 5% to 5.25% was entirely unnecessary. Andrew Bailey and his MPC are generating a recession that the Conservative Party will pay for.
August 5, 2023
Maybe that’s the plan. They didn’t do Truss any favours with their bond timing..
August 5, 2023
That WAS the plan…to get rid of Truss and install Sunk and Hunt who do what they’re told..
August 5, 2023
with 100% success
August 5, 2023
The Bank of England donât realise how their odd behaviour affects numbers and outcomes. They make choices tantamount to Casino Banking. They follow a dangerous pattern of putting so much on the red, yet is we whom they place at risk from their antics of Russian Roulette.
August 5, 2023
Bloke
They know only too well what they are doing, itâs deliberate
August 5, 2023
Or are they just following orders?
The one global/EU command fits all syndrome?
They obviously donât care about any comeback.
(Pretend defiance of Just Stop OilâŠstill being economical with the truth!)
August 5, 2023
Something doesn’t smell right – they’re using monetary tools rather then fiscal tools
August 5, 2023
They should cut taxes for a start.
Apparently the Chancellor has a â4Esâ strategy (enterprise, education, employment, everywhere).
And the IMF thinks that what we need is âambitious reformâ.
Ho, ho, ho.
August 5, 2023
Same academic computer modellers who predicted half a million dead from covid and the ice caps melting by last year.
I think the most important thing you can do is force them to publish these computer models. There is some website software called github that will allow them to do this for very little money.
When Ferguson gave his pandemic modelllinf code to Microsoft they were not impressed. My guess is these treasury modellers will also be found out as amateur hour hackers.
August 5, 2023
Javelin
Yes, we do need to know how these completely wrong results are arrived at through computer modelling and why policy is made on the back of those bad answers.
August 5, 2023
Authors of scientific papers accepted for publication by the Royal Meteorological Society journals and relying on computer modelling are required to provide access to their codes. So you should be able to download such pieces of code and run them to your heartâs content (thatâs assuming you would know how to download from a code repository like GitHub the code, the initial conditions, and the adequate script to run what is often a O(10^6) lines of code on your computer).
August 5, 2023
Hef,
That seems logical. But not accurate.
I seem to recall he refused to to let anyone view his code for modelling until forced and then it became clear what a load of tosh the govt. had been told and based its actions/policies on!! He was also wrong with foot and mouth. A track record of failure. We were told he left govt only to be snuck back in when no one was interested!!
In my view Javelin is a good blogger with fact under pinning his opinion.
August 5, 2023
I wonder whether as a City worker you are/were a quant or merely one who pushed âstartâ to run financial simulations after changing one parameter in an input list but without having any idea of what was ÂŽunder the hoodâ
August 5, 2023
The SMMT have issued very interesting July 2023 figures for the UK car market. Year to date there have been 1,093,641 new car registrations, of which 594,780 were various flavours of EVs and hybrids (just over half). This includes 175,978 pure battery electric vehicles. Tesla has moved up into fourth place with it’s Model Y selling 21,835 units, just behind the Ford Puma at 26,889 and the Vauxhall Corsa at 23,751
This outstanding result for EVs has been achieved in spite of relentless anti-EV propaganda inserted into the Tory press month in, month out, all year. As I have been posting here for ages, the public is enamoured of electric vehicles as it only costs ÂŁ15 to drive 350 miles – with no ULEZ costs.
Unfortunately Schraps has still not managed to organise the desperately needed upgrades to the electricity grid; the number of new EV chargers connected has reduced to ~1600 a month (source; Zap-Map June 2023) as there is now insufficient grid capacity for more. We now have only 44,408 chargers installed across 25,521 locations.
But it’s OK! Schraps has just given a ÂŁ20 BILLION SUBSIDY to the oil majors for their completely unproven carbon capture and storage scam. Rock on the fossil fuel lobby.
Reply So under 1 in 5 purchases are of battery EVs, hardly evidence of great support. as you say, shortage of fast chargers is a problem. The power at fast chargers has got a lot dearer.
August 5, 2023
Running an EV will not remain cheap because the government will not want to reduce their total tax take from all drivers and when EVâs are mandatory theyâll pile the taxes back on them – why wouldnât they ?
August 5, 2023
âRemainâ cheap? For a typical user a new EV will cost about 70p a mile this just in financing costs and depreciation over its useful life. They cost more to insure, need charger(s) fitting and a place to charge, tyres wear out about 30% more quickly and you likely need a new ÂŁ15k battery quite soon too or write the car off.
Keeping your old petrol or diesel might typically cost about 60p a mile less.This despite paying more tax on fuel and road taxes. Far more flexible and less likely to set the house alight too!
August 5, 2023
I saw that article SG and have been trying to find out how much of that surge was from Fleet Lease (e.g. Company Cars).
My son’s Fleet Manager very strongly suggested he had a plug-in hybrid version of his company car (although a pure ICE version is avaialable) because there are tax advantages. No one asked him if he could plug it in at home of course (which he cannot) and as he claims company petrol, he doesn’t really care what the car costs to run. So his car is effectively just an ICE vehicle with an extra 500kgs of weight to drag around.
I’m pleased that your car only costs ÂŁ15 to drive 300 miles but for the ÂŁ10K+ I saved by purchasing my ICE vehicle I can effectively drive 55,000 miles for absolutely nothing (ÂŁ1.40pLtre @ 35mpg). Being only one year old I wouldn’t pay ULEZ either should I be foolish enough to drive into London. Nor will my carbon footprint exceed yours for the first 50,000+ miles (ref both Volvo + VW) which in my case is well over 12 years. All of this is fact, not fiction and most people can do the simple math for themselves – apart from Fleet Managers it seems.
August 5, 2023
Correct – they’re just a short term tax advantage
August 5, 2023
+1
August 5, 2023
BTW – I was also struck by the head of Moto (UKs largest Motorway Services provider) recently talking about delays in making high capacity chargers available. The problem is not in installing the actual Chargers but in getting them connected to the grid. He has chargers installed but cannot connect them. He also mentioned that the new chargers at his service staion near Exeter (I think it was) would need about one third of the power that the whole of Exeter currently uses. That’s just one Motroway Services Station and that’s not Fiction, that’s Fact.
August 5, 2023
Sakara
An EV if you can afford one, is certainly Ok for use as a second car for short journeys, but only if you can charge at home.
If your family needs to complete long journeys from time to time, and can only afford one car, then I would suggest sticking with an ICE vehicle is more sensible, certainly until fast charge batteries, and a proper charging structure has been developed and established, then certainly the present/older battery type cars which are standard now will plummet in value.
Toyota are suggesting the development of a Solid State type battery with a range of 900 miles and a charging time of 10 mins is on the way to being developed, but timescale not yet suggested.
August 5, 2023
EVs are ok for shopping or for blasting down the byepass at F1 acceleration if you can afford that sort of model. Useless if you have no driveway, worse if you live in a highrise and a no no if you have to travel any distance towing a caravan with the aircon, wipers and radio on during the night. Then we have environmentally disasterous mining of rare metals on which EVs are dependant, said metals 90% in the control of the Chinese CP, same CCP poised to flood us with cheap vehicles because we are not making them ourselves, lack of sufficient electricity or fast charging facility, in fact the standard UK government screwup. With science and engineering there are far better options than this insanely inspired rush to hell in a handcart.
August 5, 2023
Can the EV manufacturers deliver the vehicles with a conflict minerals declaration?
August 5, 2023
Considering the dire policies threatened against ICE cars it is extraordinary that 80% of purchases remain ICEs and not EVs.
Please could you set out your suggestions for increasing grid capacity, using numbers. Note that the U.K., like everywhere else, is over 80% dependent on fossil fuels for its energy requirements. It would be helpful to know how many more windmills we need and how much land turned over to solar, the costs of this and of connecting it up, and what we should do on windless days and at night.
August 5, 2023
The EVs are sold to companies with massive tax bribes. The companies then pass the bribe on to their employees, so that they can have a company car tax free.
I wonder how many diesels would be sold under the same tax regime?
August 5, 2023
Propaganda !?!?!?!
So you deny that child slave labour is being used to mine the cobalt that goes into your BEV ? You deny the massive environmental damage that lithium mining does ? You deny that BEV were the cause of the fire on that car transporter recently and, the fire services do not know how to put an BEV fire out ?
Not so long ago you never had to pay for Road Tax. What happened ? Oh yeah, like all the other perks, they took that away. A bit like they did with diesels. Those who do not learn from the past are doomed to repeat its
mistakes.
Why should he ? Past governments were not responsible for creating the electricity gird in the first place. Nor much else – Canals. Railways. Roads. Telecommunications. And so on.
You’ve bought, rather expensively I might ass, into a BIG LIE. I pity you !
Some thing we can agree on but, like the hype with BEV it is all to do with the same nonsense over a trace gas.
August 5, 2023
Well said Mark B
No ! they are not fit for purpose and extremely dangerous, that sinking and burning ship last month illustrated the main problem. The fires cannot even be extinguished by removing oxygen.
I’m sticking with ICE, safe and proven.
August 5, 2023
Fast chargers are now costing circa 75p a KWH and much of this charge is wasted as heat and driving the cooling fans needed to stop the batteries overheating. Rapid charging also depreciated the battery rather more quickly with each charge. Combined you probably end up paying about 30p per mile driven when using a fast charger. This in electricity costs and the battery depreciation per mile. So costs far more than a diesel or petrol car even after you higher capital costs – and you are paying little tax on it.
With diesel about 50% of the fuel is tax. Taxed the same way it would make even less sense.
August 5, 2023
“…but have announced a long winded review of what to do about it” – led by Mr. Bernanke! If he does not know about forecasting then I do not know who does. (Obviously one discounts the 2008 great financial crash that happened on Mr. Bernanke’s watch.)
August 5, 2023
Why obviously? Did he not forecast that crash, only many did. All monetarists I believe. Anyway, I was forewarned and brought forward selling everything I wanted to sell in 2006/7.
Why donât we ask the people who forecast that crash what they predict now?
August 5, 2023
@ Lynn Atkinson – well, obviously if one includes the 2008 GFC Mr. Bernanke looks less like the right man to advise on forecasting.
One can hear Sir Humphrey now, advising Governor Bailey on the choice of inquiry leader “Above all he must be sound, able to appreciate the context”. Gov. B. “A judge, a retired academic?”. Sir. H. “I thought a retired central banker.”
August 6, 2023
Maybe not âforecastingâ but drawing lessons from what happened. See âFirefighting: The Financial Crisis and its Lessonsâ, B.Bernanke, T.Geithner, H.Paulson, 2019, Profile Ed.
August 6, 2023
@ hefner – Thank you, I was not aware they had published. I see Warren Buffet gives a strong endorsement. I may well read the book myself.
August 5, 2023
It has been suggested that there has been too much interbreeding between the Treasury and the BoE. Effectively reducing the BoE advisory panel to little more than an extension of Treasury thinking, resulting in little entrepreneurial thought at all. The LP has ended but the record continues to rotate. They are stuck in a rut of no think.
Even worse the high street banks meanwhile are running riot with their own or residual EU political agenda. Cancel all and deny a bank account to alm they consider none woke. Nigel apart, this includes parts of our defense industry, sporting gun manufacturers and clubs, and just about anyone they decide they don’t like. They are trying to cancel the use of cash to give them even more control. Government needs to deal with this monopoly and open up high street banking to much wider competition, who are prepared to get back on our high streets. The present setup is little better than the mafia.
August 5, 2023
Unfortunately I very much doubt whether anyone at the Bank watches Talk TV, any more than they are likely to have read Ambrose Evans-Pritchard’s article in yesterday’s Daily Telegraph.
August 5, 2023
All good solid policy ideas – but the whole system has been so corrupted by those that have their own agenda – those within, as well as the likes of the WEF, that it would be impossible for the Bank, and others, to change where they are taking us.
It’s not just that they know better – they simply keep pushing us in the direction they imagine we are destined for.
They don’t even believe that they are Gods punishing the masses for the evils done against the world – they do it because they can get away with the soul destroying destruction of our society, for that is clearly where they are leading us!
They imagine that they are doing something worthwhile – for themselves at least!
August 5, 2023
The BoE have effectively contracted out policy to the Fed. While the Fed continues increasing rates the BoE will too. When the Fed eventually holds rates fixed for several months the BoE will too. Same for rate reductions, theyâll act several months after the Fed. At least they are following a more competent central bank than they are themselves.
August 5, 2023
Is it global banking decision rather than our banks decision. Does America control our bank more than our own government, we are still 0.25% below the USA right now.
https://www.forbes.com/advisor/investing/fed-funds-rate-history/
August 5, 2023
A Question for Sir John. Does the Covid Enquirey Committee have an agreed budget?
I ask because they seem to be spending money like water – most recently by hiring Saatchi for some ÂŁ1.4 million to do … well I’m not exactly sure what. Sounds like money (currently over ÂŁ40M?) just being poured down the drain. What a complete waste!
August 5, 2023
The Bank of England risks raising interest rates too far in its attempt to get inflation back under control, its chief economist has admitted.
Huw Pill, chief economist at the Bank, conceded âit is possible that we do too muchâ to rein in price rises as analysts warned that over-tightening would push the country into an âunnecessary recessionâ.
How orthodoxy gets to destroy not build. Interest rate rise just as with taxes rises are inflationary – they create pressure on wages therefore costs of every producer, resulting a bigger squeeze on the consumer.
Its âBlobâ lead destruction. A crisis unfolding in front of our eyes.
Everything we want is available, if we are first released to earn as in a framework for a productive, enterprising economy. It would appear that the embedded âBlobâ orthodoxy just focuses of money for those with a need for stroking self esteem and ego â not resilient and self-reliant wealth for the whole Country.
August 5, 2023
You say raising the interest rates increases the spending power of those with savings – well No It doesn’t because people who are saving are saving they are not going out to blow it because of one quarter per cent rate hike or something stupid like that.
Government is targeting the wrong set of consumers like the house buyers and the hopefuls who are saving for whatever reason instead these people should be left alone now – there has been enough damage done – instead bring in a squeeze at the big boys the industrialists the bankers financiars etc etc choke off all other future borrowing by hiking interest rates way up for them since they largely caused the inflation in the first place.. call it a recession if you like but nothing wrong with a short sharp recession might bring everything back into like without having this drip drip chinese torture effect at the suffering classes that BoE has being going on with.
August 5, 2023
âWhy does the Bank lurch from inflation to recession inducing policy yet again?â
It’s easy.
Because theyâre communists and see their way to permanent power through the cancellation of free speech, financial mismanagement and the implementation of the unilateral Net Zero designed to take us back to pre-indutrial living standards based upon an entirely false UN CAGB narrative.
Read the Government funded UK Fires reports to know what Net Zero in 2050 will look like.
August 5, 2023
The BoE doesnât need reviews to prove reality of their decisions, they know they are behind the curve. Their brain power is to watch others first, note the outcome then jump in as the horse has bolted. We have high inflation because of their inaction that probably should have happened 12 months earlier. So instead marginal adjustments inline with the markets they are taking a sledge hammer to the situation after things have already moved on.
The BoE needs to become the Bank of England, it shouldnât be playing with the big boys in other Central Banks, it should not be playing to the WEF tune.
The problem is we have individuals with a proven track record of failure, who place their own self esteem and ego above the daily function required to do the job.
August 5, 2023
Andrew Baily must go
August 5, 2023
Our economy is badly in need of stimulation . The BoE do not understand this believing that by increasing the Base Rate it will overcome inflation and put recovery in place . They have misjudged the problem several times and increased the dilemma we face now . Sunak and Hunt have failed because they have followed the same course . Sir John is right to go public on this issue and I support his judgement . I wish his case would assemble a revolt against the Government’s stance and re-create some sense in our economic approach .
August 5, 2023
A recent statistic showed that only 30% of owned homes have a mortgage. A large number of people rent their home.
So they are targeting a rather small segment of the population.
There are a number of measures used for inflation – RPI, CPI, CPIH – some include housing costs, some don’t. If they increase rates to reduce one measure then they will increase another measure. It’s simply a game of whack-a-mole.
The fact is that they don’t have the policy tools. When the govt took away mortgage relief on rentals while the BoE ramped up rates, they created a perfect storm. When you also have a threat of some utterly dense politicians talking about rent controls (which had the opposite of the intended effect everywhere else they were tried)… the socialist nightmare has begun in Britain.
What needs to happen is that rates should be set by people who have all the policy levers at their disposal. Take this function back into government, the BoE cannot do it for all of these reasons – and they are not independent anyway.
August 5, 2023
Agreed. See my post above.
August 6, 2023
In 2021 15.5 m of households in England & Wales owned the accommodation they lived in (ons.gov.uk, 05/01/2023, Housing, England and Wales, Census 2021). 30% with a mortgage means 4.6 m households are potentially affected by any rate increase. 37.3% lived in rented accommodation (9.3 m).
As I heard from acquaintances, it is clear that renters have seen their monthly rent increased in the last year, most of them by 5-7%, sometimes by 10%, with people threatened of eviction if they did not accept the rise, an easy threat to be made by landlords given the restriction of available properties for rent.
So is 13.9 m households such a small segment of the population?
You say âthey do not have the policy toolsâ. I guess you were talking about the BoE.
So who are the âpeople who have all the policy levers at their disposalâ? The Treasury, the Government, the HoP, some economic think tank(s)? Would these people fulfil your criterion for âindependenceâ?
August 5, 2023
Your Talk TV interview was very interesting. The BoE does wish to use classic Keynesian supply and demand theory to get inflation under control. It will increase the bank rate further to cause a deep enough recession that it hopes will get inflation under control.
A cheaper and possibly quicker way to get inflation back to target would be to reduce the price of the energy inputs for businesses. Many entered into forward price hedges at the top of the market last winter and are now forced to raise output prices to prevent bankrupty.
August 5, 2023
How many economists from HM Treasury end up working for the Bank of England and for the OBR ?
Just asking.
August 5, 2023
You are right that the BOE forecasting is a joke, but until someone sacks Andrew Bailey for failing to do his job, it will simply carry on. The Government & BOE have caused the inflation but seem to have no clue what to do about it. Simply raising interest rates will eventually cause a recession! But then the PM & Chancellor have. both said that they would accept a recession to kill inflation! The fact it will kill the economy as well seems beyond their intelligence to understand.
Government spending needs to be drastically cut, Net Zero abandoned, ( the new chair of the UN IPCC has said a 1.5% increase in temperature is not much of a problem, nope would a slightly higher temperature increase be ),
then cut taxes & watch the economy grow.
An example is killing VAT, re-introducing purchase tax, paid at every transaction, whether wholesale or retail, there get rid go all the Civil Servants in HMRC who have to check & refund VAT to companies each quarter!
August 5, 2023
dw.com, 30/07/2023 âDonât overstate 1.5 degrees C threat, new IPCC head saysâ.
August 5, 2023
âSince 1993, the EU conformitĂ© europĂ©enne (CE) product safety mark has been used to show that products meet EU legal requirements.
In December 2024 the UK was to adopt its own logo (UKCA), apart from NI which has to retain the CE mark due to Windsor accord agreements
The government has now announced that the EU CE mark will be recognised indefinitely and continued throughout the UK abandoning the UKCA only markâ
https://www.bbc.co.uk/news/uk-politics-66375185
We havenât really left
August 5, 2023
Some say CE stands for China Export which is probably about right đł
August 5, 2023
Sounds about right ….like every company in china has a ISO9001 certificate
August 5, 2023
It should not be lost on this Conservative Government with 13 years of playing at doing nothing along with their co-conspirators in the âBlobâ(that includes the BoE), they created a 70 year high tax rate, the highest energy cost among competitor nations, – it is they that at the root of UK inflation. It is not the taxpayer, it is not those that are just managing to eke out a survival wage, it is the prolific spend without a care State, managed (more correctly NOT managed) by this Conservative Government.
Everyone is paying because they (the Conservative Government) refuses to manage, refuses to bring its own costs under control, and refuses the UK the right to a competitive economy.
August 5, 2023
You can scarcely call it a British government. It’s in the enemy camp.
August 5, 2023
We need a credit squeeze, that’s it, choke off all money credit to new prospective borrowers. In fact close the banks and financial institutions to the public for six months and then only open up again very slowly
August 5, 2023
Dear Sir John,
The Bank of England model has, one likes to think, evolved since I last examined it – as far as an aversion to long complex equations would allow. At that time, as I recall, the money supply played no role and there was wholly inadequate consideration of the balance of payments, the exchange rate and house prices. And oil price variations were regarded as purely temporary (fair enough) and therefore not likely to have much impact on inflation over the two year outlook (not so obvious).
However, as you have said, the main mistake was the central banks’ failure to realise that emergency interest rates in the years after the banking crisis were just that, a powerful drug administered in extremis that was bound to have side-effects and would heavily distort our economies if pursued for more than a decade. Drug withdrawal was always going to be hard and should have had top priority in central bank thinking, even when inflation was not an immediate problem. Instead we had the Bernanke/Wall Street doctrine. So now the damage is done and the pain is greater.
August 5, 2023
Andrew Bailey is a fraud just like Christine Lagarde of the ECB.. how do these people get these jobs? they seem to move about not elected by anyone at one time can be head of NATO next gig can be in the EU next can be the world bank and on it goes also no forgetting the UN and still nobody elects them.
August 6, 2023
Matt, Madame Lagarde was only French Trade Minister in 2005-2007, only French Finances Minister in 2007-2011, only elected twice (2011 & 2016) as Managing Director of the IMF (2011-2019), only proposed among other candidates (Jens Weidmann, F.Villeroy de Galhau, K.Knot, O.Rehn, A. Hansson) and elected by a qualified majority vote of the European Council as President of the ECB (2019- ). So obviously a âfraudâ, isnât she?
August 6, 2023
Hef,
Remind us why she went to court?
August 5, 2023
So we learn that âChinese-owned battery group is involved in Tata UK battery gigafactoryâ, FT 04/08/2023. What is IDS making of that?
August 5, 2023
How much inflation is caused by a) the enormous and ever increasing of state spending grabbing everything available from barristers to barges and b) Net Zero making energy so expensive that electricity and all electrical products need eye watering subsidies?
August 5, 2023
It’s over Sir John
No one I know is going to vote Conservative now. You have caved to everything and Margaret Thatcher’s legacy is trashed.
The victors get to write history and yours will be known as the Disaster Party.
I have no urge to defend it.