The Governor of the Bank should have apologised for the high inflation of recent years when he spoke at the Mansion House.
The Bank has one overriding duty,to keep inflation to around 2% per annum. It allowed inflation to hit 11%. It consistently told us inflation would not rise anything like that amount. Being unable to forecast inflation meant the Bank could not follow a good policy on interest rate levels or size of its bond portfolio.
The Bank spent 2021 creating more Central Bank money and keeping interest rates very low. It then was surprised when this produced the predictable inflation. It lurched in 2022 to hiking interest rates and selling many of the bonds it had bought at ridiculously high prices at the much lower prices it was creating.
The Bank claimed the inflation was caused by the Ukraine war which it could not predict,seeking to sidestep all responsibility for the bad forecasts and bad inflation outcome. This excuse does not work. U.K. inflation hit 6% or three times target before Russia invaded. The Swiss, Japanese and Chinese Central Banks which did not create so much extra money and buy more bonds presided over inflation which stayed around 2% despite the oil price surge that did follow war time decisions. The Fed and ECB made similar mistakes to the Bank of England and also ended up with higher inflation and wrong forecasts.
The Bank needs urgently to review its past errors. It should stop selling bonds at huge losses,a policy no other Central Bank is following. It is burdening taxpayers and intruding on fiscal policy.
November 17, 2024
Indeed but Sunak was Chancellor under Boris at the time and their idiotic net lockdowns, covid support, net harm Covid Vaccines (see the excess death and timings of them), QE and vast borrowing and waste agenda was as much to blame as the incompetent BoE (HS2, duff degrees, Covid lunacy, PPE fraud, “vaccines”. Plus the government is in charge of the BoE in reality but chose to go along with their currency debasing agenda.
It seems plenty of people told the daft as a brush Sunak not to throw the towel in early. We could be having the election now. So why did the dope do it. Why too did he tell the house the Covid Vaccines were unequivocally safe and why has he still not corrected this?
November 17, 2024
Good morning.
Sorry but I wish to go off topic.
I have just watched, Harry’s Farm on YT. He claims that the Treasury have got its figure wrong over IHT for farmers. With such bad information being given to the government, whether it comes from the Treasury, the BoE, OBR etc how can any government hope to run the country.
It is high time that CS’s are made to pay for their errors. They are costing us too much.
November 17, 2024
Taking 20% off the capital value of a farm off a family every generation will be close to taking all the post tax income from the farm off them for the 25-35 years generation. With income tax, vat, NI and IHT every 20 odd years they will effectively taking almost the whole farm returns off you. This as returns in farming can be rather low relative to capital deployed but it can be similar for some businesses too.
November 17, 2024
Agreed. He also pointed out other budget measures that will add significantly to the costs of farming. I have heard of one farmer who says he will earn ÂŁ1000 per acre of he install solar panels even better than Harry Metcalfe will earn by planting grasses instead of crops. Has the government worked out where it will buy the food that will no longer be grown on UK farms? And has it worked out which industries will still be around the earn the export revenues to pay for it?
November 17, 2024
I watched Question Time the other day. Five people plus the Chairwoman, non of whom showed any sign of any understanding of energy, engineering, climate, logic, energy economics… Why not at least have one such person on a Matt Ridley type?
One person was even so daft she thought Valencia floods were to do with manmade CO2!
Another said the amount of “power” stored in an EV car would power a house for a week. Well he meant energy but perhaps does not know the difference. Anyway two days would be more like it and if the house was heated by heat pumps and it was winter and had an EV car it would be more like 2 hours.
Who would want to use their car to overcome the intermittency of “renewables” who want a flat car in the morning and the charge discharge depreciation caused makes in uneconomic to do so.
He then made the idiotic statement that you cannot recycle petrol but can recycle EV batteries.
Well the battery is essentially the fuel tank mate not the fuel. You can easily recycle a ÂŁ50 plastic tank. ÂŁ20,000 of EV batteries is a rather harder problem and vastly more expensive to renew. Plus the Batteries last only 6-10 years far cheaper plastic tanks last far longer 30 years often.
The petrol is the equivalent of the electricity used to charge the battery and is largely generated from Coal, Gas, Oil, Nuclear, burning wood at Drax anyway! And not renewables are not cheaper once back up is considered. So just the same a petrol.
November 17, 2024
Call that net-zero, Sir Keir? Britain has an astonishing 470 DELEGATES at climate change summit that’s a 5,000-mile round-trip flight.
The Mail on Sunday today! Did they not all cycle there? Not that that would save CO2 but at least these people would not be doing more harm to the UK for a week or three if harmlessly cycling.
November 17, 2024
All five + chair on QT we believers in the CO2 devil gas religion needless to day. The BBC bias on this topic is a total outrage and as usual the BBC is wrong on the issue. Thank goodness for the climate realist Trump. The BBC also endlessly attacking Robert F. Kennedy Jr., Trump’s pick for health secretary for his Vaccine Realism and being for bing a “conspiracy theory” person.
Conspiracies like Covid came from a lab and the Covid vaccines and lockdowns did more harm than good and Net Zero is an exaggerated scam, big Pharma largely controlled the regulators – all of which are now almost certainly completely true!
November 17, 2024
I think we have done the Bank of England to death. Not without good reason, but the audience who are with you are begining to yawn. It is begining to take on a similar ennui to dear LL’s battle against covid vaccines. There are bigger current dragons to slay.
The self motivated police fight against freedom of speech. While I acknowledge that there may be some unforgivable things written on ths internet, even worse than that said under parliamentary privalege, without subsequent aplology in some cases. It does not merit their attack on journalists or children in playgrounds. It emphasises the inadequasy of failed policing, desperately grabbing at the lowest fruit. While at the same time ignoring shoplifting, mugging, burglary and car theft. All of which require a bit more than simple addition, perhaps to the application of a touch of algebra. At the heart of their failing is the police senior college and their product of socially engineered senior police officers with the script writers at the Home Office.
Then there are the small and average sized farmers of the UK. All being asaulted by the economic illiteracy of the Chancellor , the Treasury, and ultimately HMRC. It may be only one of her sins from her budget, but it is occupation specific, and the results shortly to become obvious in our supermarkets and the cost to the shopper. This is another piece of class envy driven by the mallice of Islington.
So, give the BOE and its govenor a rest, the level of incompetence is a natural home for Labour and the ingredients for their permanent departure.
Reply Go to another site if you do not like this one. I write about things I understand and wish to change. No one else is highlighting the failings of the Bank and the huge impact they have on political and economic outturns.
November 17, 2024
Bailey will do everything he can to prop up the communists in government. He’d already showing his true colours by saying Brexit harmed the UK economy. The fact we had higher growth until 2TK started trashing the country is never mentioned by the BoE or the OBR.
Bailey brought Truss down by selling of gilts at an enormous loss to the taxpayer and blaming her budget.
It will be interesting to see who gets the blame when we go into recession whilst America booms.
No doubt it will be some outside influences.
November 17, 2024
So why does Bailey largely escape criticism apart from that for falling asleep in a meeting when he was in the FCA?
November 17, 2024
“The Bank of England damaged the U.K. economy, not Brexit”
Indeed but the failure to take full advantage of Brexit did too as did the Covid lunacy from Boris and Sunak and the 14 years of tax borrow and waste Socialism from Cameron through to Sunak and now even worse from Starmer with 2/3rds of MPs from 20% of the electorate gifted to them by throw the towel in six months early and pushed of the Net Zero scam and vast open door low skilled immigration Sunak.
November 17, 2024
Reeves seems to have been retrospectively correcting her CV dishonesties. But surely the main thing to correct is her huge lie that her budget was “a budget for growth”. It was the complete reverse in every respect.
November 17, 2024
She should be drummed out of parliament for lying on her CV
In the private sector it’s a sacking offence.
In government lying is seen as a positive trait
November 17, 2024
Good Morning,
Conclusion: The ‘Independent’ BoE, essentially the Money Management office of the Treasury Department, developed it’s own political agenda over time. That agenda developed because the BoE doesn’t have to follow the political principles that of the government in office, hence the political views of the Chairman became the guiding force for the institution.
The overt anti-Brexit stance, the undermining of the Truss plans were the most egregious evidence of its political activities. Tories could have, but didn’t, sort that out.
November 17, 2024
Our host never seems interested in pursuing the reason why the BoE ‘made the same mistake’ as the Fed in the USA. We surely have to question whether the BoE is independent and takes its own decisions. As for Bailey’s claim that he could not predict the Ukraine war, British intelligence did, and I doubt that would have been kept from him. In any case, plans were being made years ago which he must have known about, to bring Ukraine’s economy into the Western orbit via privatisation and engagement with the International Monetary Fund. This meant turning Ukraine away from Russia, a clear provocation to the Kremlin. The National Bank of Ukraine was talking about being at war with Russia years before 2022, because of the Donbas conflict. If Bailey didn’t follow that situation and its possible consequences, he was very remiss. Anyone in business knows that regularly conducting a SWOT analysis is vital, but apparently Bailey didn’t do so.