The Bank of England

I think the Bank was right not to raise interest rates this week pending more knowledge of the Labour market and wage rises now the furlough scheme has ended. I am against raising rates all the time the Bank is creating more money to buy bonds to keep rates down. It would be a contradictory policy.

I have called for an end to more money creation.The Bank has created quite enough. Savings are high, so many people could afford to spend more if they wish. Bank liquidity and capital is strong, so banks could lend more if people wanted to borrow more. There is no need to create more money. If people and companies did decide to spend much more of their cash and borrow more to increase their spending inflation would pick up more. No need to stoke the money fires further.

 

The task of money management is not easy. There is a slowdown underway which will be intensified by the squeeze on real incomes next spring from delayed energy price rises and the tax increase. There is also a steep and predictable rise in inflation which the Bank did not see coming earlier this year but is now forecasting .

I would stop the money increases and watch the Labour market. Only if there is clear evidence of wage settlements generally taking off to embed the temporary price rises will we need higher rates. So far the wage rises are a feature just of a limited number of activities in shortage.

The government is squeezing incomes too much in the year ahead.It should cancel the National Insurance rise planned for April.

161 Comments

  1. Ian Wragg
    November 7, 2021

    Robbing we pensioners still.
    Anyone who has been prudent is being raped by this government. Inflat 5%, interest rates 1% and taxes are 55% overall. Shameful.

    1. matthu
      November 7, 2021

      Not only the prudent are victims.
      And the trouble is, the assault is both transparent and blatant and not limited to financial rape.
      Charges should also include physical and mental coercion, embezzlement and corruption.

      1. Paul Cuthbertson
        November 7, 2021

        MATTHU – All part of the NWO Plan. Big Brother will look after you. The real conspiracy theorists believe their government cares about them, the media would never mislead or lie to them and the pharmaceutical industry that makes billions from sickness wants to cure you.

    2. Nig l
      November 7, 2021

      Yes. Deliberately reducing the standard of living for many in this country whilst pouring it out abroad, virtue signalling on not yet ready going green technology etc.

      Sir John conveniently overlooks the political impact of a rates hike and a massive increase in the cost of funding government borrowing so the BOE will have been pressurised by the Treasury.

      He mentions money supply in passing but again nothing on the eye watering amounts being wasted by an administration addicted to inefficiency.

      100 billion would seem loose change. Let’s have that modelled to see it’s impact on the rate of inflation.

      Reply See my piece re NHS spend

    3. Everhopeful
      November 7, 2021

      +EXACTLY.
      But what does this govt. care about those who worked and paid in etc?

    4. Sir Joe Soap
      November 7, 2021

      Look on the bright side. It would be worse under either May or Labour. By now, the unions and EU would be running the place, and we’d still be locked down.

      1. Micky Taking
        November 7, 2021

        At least the unions would look after the people who worked in between strikes. Currently the ones who have mates take more than the cream off the milk, just dregs left in the bottle.

      2. Peter
        November 7, 2021

        SirJS,

        I am afraid the ‘worse under Mrs.May or Labour’ argument no longer cuts any ice.

        The current Conservative party is not fit for purpose and not really conservative.

        It would be better if it was hammered in the same way as the Labour Party was after it lost Scotland.

        Get rid of all the careerists and chancers looking after number one and get a grip on corruption, free holidays and sleaze.

        1. William Long
          November 7, 2021

          I agree and we could actually be better off under Labour as it will probably go the other way to demonstrate that it is not so bad after all.
          As for the Government admitting it had made a mistake by cancelling the Employment Tax rise, there is more likelyhood of Greta Thunberg allowing the possibililty of frost at the equator.

          1. No Longer Anonymous
            November 7, 2021

            Sort of. I’m afraid we now need to go further into the hole to build the momentum (anger) to get out of it.

            Had the Tories fielded their true manifesto instead of the fake one they would have been as unelectable as Labour too.

            Keep pushing, Boris. You really want to test if there is a revolution in the British people ? We’re only humans, no different to any other nation.

        2. John Hatfield
          November 7, 2021

          And get rid of the EU entirely.

          1. Nottingham Lad Himself
            November 8, 2021

            You could only do that by moving the entire UK land mass to a planet where there is no European Union.

            Be realistic.

    5. jerry
      November 7, 2021

      @Ian Wragg; “Robbing we pensioners still.”

      When did interest rates turn negative?

      Those who have been ‘prudent’ will not have planned their retirement funds to rely upon there being high interest rates!

      Trying not to sound to much like young @Andy, whilst high(er) interest rates might be good news for savers the flip-side is they rob from the younger generations who still have (necessary) debts.

      1. Ian Wragg
        November 7, 2021

        No one is asking for high interest rates just enough to stop devaluing our savings.

        1. jerry
          November 7, 2021

          @Ian Wragg; Oh right, so basically you expect to be protected from inflation, well we all want that, so what makes you think your generation is a special case?!

          1. Micky Taking
            November 7, 2021

            The generation you refer to WORKED many decades and saved / invested to ensure adequate cover in old age. Are you suggesting Government can now rob them of their prudence? That is exactly the wrong message to the young. Why bother to plan for the future when government just steals it!

          2. jerry
            November 8, 2021

            @MT; “Why bother to plan for the future when government just steals it!”

            No one has stolen anything! Nor do I call it “prudent” to plan ones retirement income on interest rates rather than tangible assets that can be sold.

            I might not like BTL property investments for example but I fully understand why some have bought them as party of their retirement portfolio, either the ‘drip-drip’ income from continual rental or the lump sum from selling-up and cashing in, and let’s not forget the once family home, many retirees could raise money by downsizing, and many less stubborn retirees do just that, or release equity in other ways.

      2. Stred
        November 8, 2021

        Those savers who put their savings into buy to let and have done well up to now are about to find that the green zeal upgrade from D or E to C on the energy efficiency cert for older houses will cost £20 k for triple glazing , insulation and heat pumps etc. It will still not save tenants much but result in selling, no income and lots of capital gains tax for Johnson and Sunak. Clearing the way for the banks to be landlords, just in accordance with the NWO agenda.

        1. jerry
          November 8, 2021

          @Stred; I agree with the thrust of your comment but the BTL sector still has the option to sell, the real victims will not be the property owner but the tenant as BTL and smaller Landlord rentals vanish.

    6. matthu
      November 7, 2021

      embezzlement: misappropriation of funds placed in one’s trust
      corruption: dishonest conduct by those in power
      coercion: persuading someone to do something by using force or threats
      sleaze: immoral, sordid, and corrupt behaviour or activities

      Seriously – is there anyone left still prepared to defend the government against these charges?

      1. Micky Taking
        November 7, 2021

        deathly silence prevails….

        1. jerry
          November 8, 2021

          @MT; Indeed, very telling that no one feels able to risk rocking the boat, to many skeletons in Westminster cupboards perhaps? Or perhaps its just non were published, give that comments are censored on this site even when referring to (now proven) discredited conduct by someone who has been dead since 1978, had been non resident in the UK since 1975, had been out of politics since 1974 and had not been a Minster since 1964…

    7. No Longer Anonymous
      November 7, 2021

      Under Blair we had government by sofa-talk.

      Under Johnson we have government by pillow-talk. That includes the minister who used duff information to keep us under lockdown.

      So now we are committed to dependency on Russian gas and French electricity and Far Eastern plastic production with NET ZERO control over any of them.

      All of it because old people are the enemy and this nihilistic war on our past (of which only 1% of our population were guilty – those compensated for slavery.)

    8. Helen Smith
      November 7, 2021

      Please tell me where you manage to get interest rates as high as 1%

      1. hefner
        November 8, 2021

        According to Which? Money, October 2021, Atom Bank (1.5%), Tandem Bank (1.41%), Zopa (1.36%) were giving interest rates higher than 1% for one-year fixed-rate savings accounts. And for three-year fixed-rate savings accounts, the rates were 1.76% for Tandem and Zopa 1.76%, and 1.66% for Atom Bank.

  2. turboterrier
    November 7, 2021

    A lot of people are not spending their savings because the fear what could be coming on this road we are being dragged down.
    Never a fan of Major but when he really puts his head above the parapet maybe it could be case of heed the gypsy. warnings.

    1. Lifelogic
      November 7, 2021

      From the current hugely over taxed and over regulated position further tax rises are insane and will be counter productive. To add the insanely expensive energy and entirely pointless and also counter productive net zero agenda to this is even more idiotic.

    2. Everhopeful
      November 7, 2021

      +1
      Exactly what I thought!
      First time I have felt somewhat warm towards the man.

    3. Leslie Singleton
      November 7, 2021

      Dear Turbo–I too was never a fan of Major and I am even less of one now. Acting the pompous prig just doesn’t do it as an elder statesman. Did I read that he had suggested that Paterson be made a Lord? Is that how he thinks the Lords should be? Paterson may have had a hard time but giving solace is hardly one of the Lords’ functions. And Paterson did get a lot of dosh for doing very little–and while an MP, which is the bit that puzzles me.

      Reply Major did not propose a peerage. Nor has anyone else.

      1. MWB
        November 7, 2021

        I heard the interview with Major yesterday, and he seemed to be overly concerned about the small cut in overseas aid. He made no mention of the cut in the state pension by removing the link with earnings, making the worst state pension in Europe, even worse.

      2. matthu
        November 7, 2021

        The Financial Times reported that party whips warned at least one MP they could lose future funding for their constituencies if they did not vote for the amendment on Wednesday.

        So what is the point of MPs if they all have to toe the line, however unwillingly, on somethig that should be a matter or principle?

        1. Micky Taking
          November 7, 2021

          A new name – for ‘Member of Parliament’ substitute PM’s sheep.

      3. Lifelogic
        November 7, 2021

        Seems unlikely Major would do that as Owen Paterson was a sound chap and a good MP, whatever the rights and wrongs of this case. Not the type John Major would support.

        Major until he says sorry for (and admits the errors of) his appallingly damaging ERM fiasco and his EU treaty stance cannot be taken seriously if indeed he ever could be.

      4. Norman
        November 7, 2021

        North Shropshire is a wonderful constituency, very rural and unspoiled, as is most of the county. From what little I know, Owen Patterson struck me as the ideal man to represent it, and what few dealings with him I had, he was always personable and kind. I do not understand how this train of events has happened, but I certainly understand how those who know him would want to stand by him, if they possibly could, even if errors of judgement had been made in interpreting the rules. It does seem clear , though, that our elected representatives should not be paid private fees for lobbying on behalf of what they may regard as just causes. Understandably, the media and adversarial politics show no mercy in such situations.

        1. Lifelogic
          November 7, 2021

          Indeed, but when you look at so many of the policies such as net zero, HS2, the climate change act, energy certificates, burning wood for electricity and thousands of others you have to assume they are only due to crony capitalism and powerful vested interest no other explanations for these insanities makes any sense at all.

        2. rose
          November 7, 2021

          Owen Paterson is not just a loss to Shropshire and to farming but to the whole country. Brought down by Kathryn Stone and Chris Bryant! I had better not say any more.

        3. Fedupsoutherner
          November 7, 2021

          He was a brilliant MP and we missed out from him being ours by half a mile. You are right Norman. Shropshire is a lovely county.

      5. Leslie Singleton
        November 7, 2021

        Dear Sir John–Like think you are right but have just looked at BBC Online News (again?) where easy to find stories saying, to take a mild example, that No 10 declined to say that Paterson not been offered a peerage. I certainly agree it would be preposterous if he had been but then of late No 10 seem capable of anything, apparently. Hope they have not engaged you in damage limitation.

        Reply No contact with me on this issue.

        1. rose
          November 7, 2021

          Why should the PM’s staff answer every malicious question from the BBC? They would never get anything done. It is quite obvious to anyone with any sense or sensitivity that Mr Paterson would not wish to go anywhere near Westminster after the way he and his wife were treated by its “watchdog”.

    4. Sir Joe Soap
      November 7, 2021

      Indeed, you’re never in a good state if you’re damaged by a mauling from a dead sheep.

    5. Sakara Gold
      November 7, 2021

      @turboterrier
      +1
      John Major said what had to be said. This government wallows in sleaze.

      I see Useless Eustice has dug himself into an even deeper hole, claiming it’s all “a storm in a teacup” Methinks the man doth protest too much. Who tried to re-authorise neonicotinoid pesticides the day after Brexit? Who just legalised the dumping of raw sewage in our rivers? And the destruction of ancient woodland by developers intent on bypassing planning controls?

      Eustice’ Register of Members Interests should be closely examined.

      1. MWB
        November 7, 2021

        Water companies in England should now be confiscated and put into public ownership, after their role in the destruction of English rivers.
        I never thought I would ever advocate this, but the Tories have abandoned people like me who should be their natural supporters.

        1. Leslie Singleton
          November 7, 2021

          Dear MWB–Many do not seem to realise that the way the Good Lord and Mother Nature set it up is that the products of defaecation and indeed urination stays on land as natural and unbeatable crop fertiliser and rivers provide unsullied clean water, from rain, for drinking and the natural husbandry of fish. What happens these days is simply disgusting and we have to pay for it, yet.

        2. miami.mode
          November 7, 2021

          Whenever I see the initials MWB it always reminds me of the old Metropolitan Water Board, lol, but I agree that although they may have had the usual public ownership inefficiencies at least the old water boards were not as egregiously greedy as the current lot of water companies seem.

    6. Fedupsoutherner
      November 7, 2021

      Agree totally with your post Turbo. Major doesn’t score very high in my world but he’s spot on with his remarks and judging by the comments on John’s topics many of us feel the same.

    7. No Longer Anonymous
      November 7, 2021

      I didn’t save. In 2013 I couldn’t see the point and took out another mortgage after the first had finished and maxed out my lending and bought a property with lodger potential in it.

      My guts were telling me it was madness but it turns out to have been a bang-on-the-money decision.

      On today’s estimations I’ve made 200k but I take that with a pinch of salt.

  3. Javelin
    November 7, 2021

    I’ve worked in the FX markets for 30 years and see interest rates as a measure of risk to repay Government borrowing. It therefore signals the volatility and credibility of an economy and Government. Incidentally I see FX rates as the competence of a civil service at managing a country over the long term.

    Interest rates were weaponised in the 1980s and 1990s to punish easy borrowing by business and home owners to fund growth and stop a boom bust cycle and demand for higher wages due to Government incompetence at controlling unions. It was a blunt but necessary tool used like a war hammer.

    Today low interest rates are the result of competent economic management and the control of borrowing using legally controlled credit controls. That is also why the UK housing market is one of the most stable in the world. I still think tax and red tape on business is too high. High interest rates were set to stop business owners and house buyers popping down the road to see Frank the bank manager and asking for another £100k to find pay employees pay rises or borrow more for a new house.

    1. Javelin
      November 7, 2021

      Just to add if the Government want to bring inflation / cost of living down they need to shift manufacturing to the UK and to prioritise distributed trade agreements to create a stable supply chain.

      The world is moving to a less stable economic outlook with offshore dependency on critical manufacturing materials such as lithium (batteries) and magnesium (aluminium).

      I would be looking to the US, Greenland, Australia and other countries to create a stable supply of raw materials.

      Supply chain volatility has been exposed as a major future problem not just a blip after a pandemic.

      1. SM
        November 7, 2021

        +10

      2. Dave Andrews
        November 7, 2021

        If manufacturing is to return to the UK, then education needs to adapt to prepare the workforce. Industry needs to be paid to take on apprentices and continue the work of education not done by schools. In the present system, you’re a fool to train anyone because you just provide skills for other companies to buy in who don’t invest in training.
        Why do we have a lack of lorry drivers? Because hauliers stopped training.
        The complaint that people can’t get a job because they haven’t got the experience, and can’t get the experience because they don’t have a job – has been around for a long time.

        1. jerry
          November 7, 2021

          @Dave Andrews; Spot on! +1,000,000

          All things both industry and the govt had been doing since 1945 at least, then came the idiocy of the last 40 years here in the UK, where short term profit was all that mattered, just so long as the shareholders are happy, end result – “Warehouse UK Plc”, along with no loyalty by employer or employee…

          1. Peter2
            November 7, 2021

            DA
            How do you compete with the land costs, labour costs and energy costs in China, India and elsewhere compared to the UK ?
            There is a growing manufacturing sector in the UK but they are mainly low volume high value high skilled labour companies that are thriving.

          2. jerry
            November 7, 2021

            @Peter2; How is it that many, perhaps most, other industrialised countries manage to have both a profitable ‘low volume high value’ and a profitable ‘high volume low value’ sectors, might it have something to do with those countries not having the ingrained and defeatist attitudes so evident in your comments?

          3. Peter2
            November 7, 2021

            Well I wasn’t actually responding to you Jerry but do feel free to immediately join in.

            Who are the “most industrialised nations” you say can uccessfulky compete in high volume production industry against China India and others ?
            Can I have a list?

          4. jerry
            November 8, 2021

            @Peter2; “Can I have a list?”

            You want me to list just about every developed industrial country!

            Are you suggesting, for example, Germany, France, Spain, Italy, USA, Canada, Japan, Australia, etc etc etc. do not have HVLV manufacturing? That is not to say they make everything, but nor have they abandoned the HVLV sector in the the way the UK has, something our host appears to (now) accept has happened.

          5. Peter2
            November 9, 2021

            I didn’t say that they didn’t have ANY Jerry.
            Re read and comprehend what I said before leaping in.
            I said there is a growing manufacturing sector but it is mainly (note mainly) lower volume, high value, high skilled labour companies that are thriving.

            PS
            We the UK (do you mean the State?) has not abandoned the high volume low value sector but world trade competition means it is difficult to succeed, which is why. we in the UK, has trended towards high value lower volume industry.
            And that trend is bringing success.
            We now employ nearly 3 million people in manufacturing earning an average of £32000, it contributes 11% of GVA, accounts for 45% of total exports totalling £275 billion, represents 70% of business R and D and despite you thinking back to the 1970s the UKs industrial sector is the 9th biggest in the world.

          6. jerry
            November 9, 2021

            @Peter2; Stop trying to deign or change what you actually said, and thus implied;

            “How do you compete with the land costs, labour costs and energy costs in China, India and elsewhere compared to the UK ?”

            But all those countries I cited do compete with China, India and elsewhere, so why can’t, or won’t, the UK? The problem isn’t low cost China & India etc. but more likely high cost UK, be that due to our politics (so how come Germany can still burn coal in their power stations and we can’t), and our social expectations…

            As for your PostScript, your point being what, the UK was doing all that and more (adjusted) between 1945-1979. You celebrate in 2021 there being “nearly 3 million people in manufacturing”, yet the UK economy lost 3-5 million jobs in the early 1980s, mostly from manufacturing! Our R&D was also sold, or gave UK Plc an edge, worldwide during the same post-war period.

        2. No Longer Anonymous
          November 7, 2021

          And lorry driver’s conditions are shit. And now they propose to ban wet wipes which will make it worse for drivers. Easy for middle class working-from-homers to support that policy !

          1. No Longer Anonymous
            November 7, 2021

            PS, as a remote shift worker I carry wet wipes (and toothpaste) too.

            Easy for the likes of Andy to ban them.

            They really don’t give a toss about the people who kept them supplied during lockdown.

          2. jerry
            November 7, 2021

            @NLA; There was life before wet-wipes, there will be life after wet-wipes, stop bleating!

          3. Nottingham Lad Himself
            November 7, 2021

            Maybe if workers were allowed to have proper union representation and could fight effectively for better conditions, then no one would have to do that anyway?

            Yours sound appalling.

          4. a-tracy
            November 10, 2021

            NLA – there are facilities for HGV drivers but not all of them use them to save money.
            Our local truck stop with 600 spaces is low cost £23 per night including a meal but the drivers prefer to park on a nearby business park with no toilets or facilities, whereas the truck stop has showers and full facilities and CCTV. Personally I think the Scottish companies using these drivers should check why.

            The drivers have the Transport and General Workers union to join should they choose, lots of the ones looking to keep money in their pockets are self-employed not employed drivers and many of European looking to cut their costs.

          5. jerry
            November 11, 2021

            @a-tracy; Stop commenting on HGV’s and their drivers, have you ever driven one, have you ever had to obey driving hours laws, I doubt it… When a HGV drivers driving hours are up they have to stop (it is a criminal offense not to) for a rest break of their overnight rest, but nor can most hauliers afford to waste time by stopping an hour or more before they need to so there might well be no facilities anywhere close.

            But than that has always always been the case, even before tachographs became mandatory, my objection to @NLA was his belief the absences of wet-wipes would affect job/entry retention, it won’t, but if it does this country is well and truly sunk, gone soft and woke (the latter due to right wing lies about job expectations), the lack of drivers is the least of our problems as there are many jobs with similar or even worse sanitary issues!

      3. glen cullen
        November 7, 2021

        Spot On Javelin

    2. jerry
      November 7, 2021

      @Javelin; You might well see interest rates and the govt as a/the real problem, that is your right, but it is also the right of (most) others to see your profession as the real problem, after all it was the speculative nature of the FX markets that directly caused Black Wednesday, not our membership of the ERM…

      As for your second follow-up comment, about manufacturing and supply side etc, I totally agree.

      1. Peter2
        November 7, 2021

        Was it the “speculative FX markets that directly caused Black Wednesday” Jerry?
        Can we have your proof?

        1. jerry
          November 8, 2021

          @Peter2; “Can we have your proof?”

          Yes, and what is more direct from the horses mouth, so to speak. Go search YouTube for “Black Wednesday (BBC 1997)”, the most relevant part of that Panorama programme starts at about 22 minutes in, complete with an interview given by one George Soros….

          There is also a now archived page from GeorgeSoros.com, published back in 2011, held by the Internet Archive, that also confirms what was said in his 1997 BBC interview. There are many other possible citations too that could be given, go do some research of your own. 😛

          1. Peter2
            November 9, 2021

            One BBC programme plus one controversial character and you have made your mind up.

        2. jerry
          November 10, 2021

          @Peter2; Yawn, your denial of the facts is breathtaking… You do understand how the FX markets work don’t you, controversial characters and their funds or not, and as I said there are other possible citations, was Mr Litterick also wrong or unreliable in his Daily Telegraph article published 13 Sep 2002? As I said, do some research.

  4. matthu
    November 7, 2021

    The chairman of the parliamentary Net Zero Scrutiny Group, Craig Mackinlay MP, said:

    “Boris Johnson assured me that the cost of offshore wind has fallen by 70%. Sober analysis shows beyond all reasonable doubt that this is not the case. Not only does this show that the PM is being given flawed information by his advisers, the public is being led into a cost and energy security disaster.”

    1. glen cullen
      November 7, 2021

      If the level of his Scrutiny is the assurance of hearsay from Boris, I believe he shouldn’t be the chairman….we should now question the ‘parliamentary Net Zero Scrutiny Group’ reports

      1. matthu
        November 7, 2021

        You may have misread what I wrote. His proper scrutiny amounted to sober analysis which contradicted Boris’s assurance. So I think he retains the chair.

        1. glen cullen
          November 7, 2021

          understood….so Boris is the weak link

    2. The PrangWizard of England
      November 7, 2021

      It may be that ‘Boris’ is being misled. It could also be that he says whatever comes into his head which might get himself out of a spot. Nor does he care if he himself misleads others. Nothing he says in my view can be trusted or relied upon. He will change his view on anything within 24 hours if the mood takes him. He is weak and betrays us all, all the time.

      If as I understand our host supports him we as individuals are lost and so is our nation.

    3. Ian Wragg
      November 7, 2021

      Germany is scrapping more wind capacity than it’s installing.
      20 year subsidies are expiring and these turbines are rendered uneconomic.
      Wind power can only exist with permanent subsidies. That’s why despite the rhetoric germany is building filthy lignite fired power stations.

      1. turboterrier
        November 7, 2021

        Ian Wragg

        Spot on the money Ian. People fighting against the proliferation of wind turbines have been saying it for years.

      2. glen cullen
        November 7, 2021

        So true – and that UK taxpayer subsidy is subsidising foreign countries to design manufacture & build wind turbines

      3. rose
        November 7, 2021

        And where are they going to dump the old turbines? In the sea? On the land? In the woods? These things are enormous.

    4. Paul Cuthbertson
      November 7, 2021

      Boris is a globalist and is promoting their agenda. What do think COP26 was all about – Control. Look at who attended. Say no more.

  5. Sharon
    November 7, 2021

    We’ve stopped spending on things that can wait…. We’re hanging on to savings, to see what happens, with EVERYTHING due to rise in cost!

    And I have heard others (economists) suggest that not raising the BofE interest rate was the right thing to do.

  6. Nottingham Lad Himself
    November 7, 2021

    People need their savings to pay for possible private treatment and care, given that they can no longer rely upon the NHS after eleven years of Tory neglect, aimed at softening up the public for increased Americanisation.

    We could take the German, Scandinavian, or French route instead, but absolutely will not under these.

    1. Micky Taking
      November 7, 2021

      When could we EVER rely on the NHS for treatment and care?
      Strange rosy memory you seem to have.

      1. Nottingham Lad Himself
        November 7, 2021

        Depends on what you want or need and how old you are.

        They did OK with the ongoing vaccine rollout.

        1. Micky Taking
          November 7, 2021

          What has the obvious purchase got to do with people saving for old age care?
          They also pissed most of £37bn down the rain on laughable checking we were isolating at home.

      2. hefner
        November 7, 2021

        I snapped my Achilles tendon playing volleyball, I broke my arm in a bicycle accident, my child cuts himself deeply doing stupid things, my wife got our third child here in England. In all these cases, the NHS did a brilliant job ‘repairing us’ and ‘taking care of us’. Same for the birth of my grandchildren. As for my three Covid injections, it was organised very well.

        So yes, proper rosy memories based on actual facts and not mindless grumblings.

        1. Micky Taking
          November 7, 2021

          Doesn’t sound like you paid enough for all that medicare….well done you.
          In the meantime hundreds of thousands of cancer cases have gone unexamined, referred or treated. So many deaths of the people who have paid all their working lives.

          1. hefner
            November 9, 2021

            And among these ‘hundreds of thousands of cancer cases’, how many are there because of bad diets or smoking?

          2. Peter2
            November 9, 2021

            Serve them right says hef.
            Charming.

  7. DOM
    November 7, 2021

    Good morning

    This is all very Keynesian in nature.

    The economy is most definitely not a machine with buttons to press to achieve a required political outcome. The economy is a most complex human phenomena beyond the control of politicians and bureaucrats who seek to master the art of human manipulation forcing us one way to save or another way to spend. This forced economic action will become legislated for at some point to protect the political class from harm

    Best before dates on savings will become mandatory to force spending with forfeit to the State if not complied with.

    The creation of digital currency is of course the political Bank of England’s great wet dream that would give the British State total and absolute control over all economic life itself. That screaming you hear is the wailing of Hayek from the grave.

    Western States have shown themselves to be utterly contemptuous of our liberties and our culture and they haven’t started yet, there’s more of this totalitarian barbarity to come. Hayek warned of this has indeed did Thatcher

    I still believe a Berlin Wall moment will occur at some point. Not today, nor tomorrow but at some point. You cannot grab freedom, morality, identity and moral decency from our world and expect people not to become angry and resentful. This anger must be expressed at the ballot box at those who we can see seek to destroy our al that we are

    1. acorn
      November 7, 2021

      There is circa £95 billion in Sterling Notes and Coins in circulation outside of the BoE (for Notes) and the Treasury Royal Mint (for Coins). “Tap-and-Go” at its new higher limit is proving very popular. There are signs that it is starting to reduce the amount of Notes and Coins required by Bank’s ATMs. The BoE has a contract to print the Notes for, and financed by, the Treasury. BTW. There are restaurants in the New Forest that have stopped taking physical cash payments.

      The trouble with Notes and Coins is, it is easy for them to be involved in transactions that dodge the HMRC; particularly the VAT. A purely “digital” currency would cure that problem. The other £900 billion the government has created and spent, is currently sitting in High Street Bank’s “reserve” accounts at the BoE. That has always been digital currency.

      I have noticed that some are confusing digital currencies with crypto-currencies. The day when sovereign currency issuing governments, start treating crypto-currencies as substitute tax credits; is the day the global financial system will implode into a black hole.

    2. No Longer Anonymous
      November 7, 2021

      When you have the Queen on your side you ARE the establishment.

      (To Insulate Britain.)

  8. Everhopeful
    November 7, 2021

    Strangely I now look back on the “Imprisonment Period” with some nostalgia.
    At that point I hadn’t fully realised that our government wants us gone.
    I still believed that it might be doing its best for us.
    The scales have now well and truly fallen from my eyes!

    They just want to steal everything we have ever worked for.
    And presumably that will impact on most MPs?

    1. glen cullen
      November 7, 2021

      We’re still in a dictatorship with out elite overlords prescribing what’s best for us common folk

      1. Everhopeful
        November 7, 2021

        +1
        Yup!
        Spot on.

    2. Ian Wragg
      November 7, 2021

      The great reset. You will own nothing but you will be happy……..

      1. Everhopeful
        November 7, 2021

        +
        And 1% will own everything.
        Then they’ll have to start stealing the spoils from each other!

  9. oldtimer
    November 7, 2021

    According to reports I have read, the markets thought the BoE had signalled them to expect a rise in interest rates. Instead it kept them the same. “Forward misguidance” was how it was described. Does the BoE know what it is about or was it under pressure from other parties not to increase rates?
    The signs are that inflation will stay high. Shortages of stuff are evident everywhere because so much of it now comes from China. Shortages fuel inflation. These will not end soon not only because the shipping system is clogged – congested ports, shortage of truck drivers and so on – but also because it is reported that China is now experiencing another wave of covid infections with lockdowns and the consequences thereof. The UK government is piling on these problems with its ill considered tax measures and ill considered “green” measures which it intends to force through. It is the road to economic disaster.

    1. rose
      November 7, 2021

      My continuing fear is that governments all over the world will use inflation to cancel their debts. As the Chinese used to say, there is no such thing as progress, only cycles.

  10. Everhopeful
    November 7, 2021

    PS
    I love the way that the plastic “problem” has been turned into a war on Joe Public.
    He didn’t ask for a decline in education and the resultant general lack of respect.
    And moreover he didn’t ask for plastic!!
    That was a corporate/government decision.
    Litter is not the problem. Plastic is!
    So go on…stop using plastic you manufacturers!!
    YOU CAN’T!

    1. Everhopeful
      November 7, 2021

      And if govt. were serious re greencr*p it would have banned fireworks.
      They are dangerous, disturbing and polluting!

      1. The Prangwizard
        November 7, 2021

        Just thought I’d mention I attended a bonfire and firework display in a beautiful nearby village – complete with duck pond.

        It was lovely with maybe 500 visitors, all donating cash for charity work. Burgers and hot dogs were on sale. A very enjoyable hour or so. I will be going again next year. I want to support our English traditions and ways of life.

        1. Everhopeful
          November 7, 2021

          Good for you. Lucky you.
          You obviously live in a well heeled part of the country.
          Here we are on our 15th night of fireworks and we also get them on Christmas Day.
          Traditional enough for you?
          Wildlife not too keen either.

        2. rose
          November 7, 2021

          The only adjustment I would make is in the noise. Why do fireworks have to have such deafening bangs?

    2. No Longer Anonymous
      November 7, 2021

      From the discussion yesterday nearly all of the plastic pollution is coming from rivers in the middle and far East. Ours is negligible in the scheme of it.

      Peter Hitchens is correct today when he says that Net Zero is just as dangerous as unilateral nuclear disarmament would be. It weakens the West fatally and China will NOT follow but over power us.

      So futile. The climate change we are seeing is the end of the last ice age – the glaciers we are shown falling into the Arctic Ocean are the same ones that started their melt half way up England 12,000 years ago without a chimney in sight.

  11. Everhopeful
    November 7, 2021

    Anyway.
    Never mind money printing, forgery and outright theft.
    Isn’t our govt. about to pull the vilest scam ever by converting our money into digital.
    All the better to control us?

    “You have gained one kilo in body fat. No chocolate purchase for you”
    “You have exceeded your methane footprint this month. Delete meat purchase.”
    Oh brave new bloody world etc!

    1. glen cullen
      November 7, 2021

      Is that in the manifesto

      Its beyond ‘a brave new world’ we’re entering the 4th charpter of ‘1984’

      Don’t forget the black box fitted to every new car 2030…and its against the law to tamper with

      1. matthu
        November 7, 2021

        Is the manifesto of any significance at all?

        It must be a long time since the manifesto listed any strong principle that differentiates Conservatism from Labour or LibDem or Green or XR or BLM or CRT or Socialism or Insulate Britain.

      2. Everhopeful
        November 7, 2021

        +1
        Agree.

      3. Everhopeful
        November 7, 2021

        +1
        Glen
        I think that the B of E has taken the first steps towards a digital currency. ( Maybe not to be the only currency…YET!).
        I didn’t take much notice of the manifesto because I was so keen to get Brexit. Ha!
        What a mug I am!

        1. glen cullen
          November 7, 2021

          The same as everyone who voted for Boris….we just wanted someone to complete the referendum and get us out of the EU
          If he had any honour he should have called for a new general election as soon as we left the EU

  12. Micky Taking
    November 7, 2021

    In a few short years Cameron’s government has been vilified, even more quickly May’s has been seen as disgraceful. I expect in a few short years, with our beloved leader back to scribbling nonsense in some daily rag, that his time part destroying our economy will be seen as such.
    Beware the ides of …err November.

  13. Breakeven
    November 7, 2021

    Can’t blame it on Carney now

    1. glen cullen
      November 7, 2021

      But the United Nations green approach with this governments monetary control of the people is the ‘green revolution’ which is Boris (UN Carney) plan….its hand in glover the same thing

    2. Everhopeful
      November 7, 2021

      +1
      Same jelly.
      Just in different moulds!

    3. Hazlet
      November 8, 2021

      Or Junker

  14. Mark B
    November 7, 2021

    Good morning.

    So far the wage rises are a feature just of a limited number of activities in shortage.

    That is not entirely correct. There wage rises because the government introduced a National Minimum Wage and has increased it. It has taken upon itself the arbiter of the price of Labour. And as we all know, one man’s wage rise is another price increase.

    It is good that we are, I hope, returning to the concept of sound money.

    Ten years ago, the Sterling was around the $1.60 mark. Today it is around the $1.30 mark. As many raw materials are priced in Dollars (US) this too can be an inflationary increase. A slightly stronger and more stable Sterling would be beneficial, not that the BoE would understand that it seems from recent events.

    1. Nottingham Lad Himself
      November 7, 2021

      Yes, it’s funny that – in 2000 you could get about 1.75 euros for a pound too.

      Now you’ll only get about 1.17.

      That’s a bigger fall still.

      “The euro will be dead and buried by Christmas 2012” – Nigel Farage.

      1. Nottingham Lad Himself
        November 7, 2021

        Or, as Edmund Conway wrote in 2010 in the Daily Telegraph “The single currency is in its death throes and may not survive in its current membership for a week, let alone the next five years”

        I don’t seem to remember the OBR making any forecast quite as preposterous and erroneous as that, but people here still trust the DT as gospel.

        Funnier still, is that.

        1. No Longer Anonymous
          November 7, 2021

          Fair points NLH.

    2. Dave Andrews
      November 7, 2021

      A stronger Sterling is no benefit if you’re manufacturing in a global market. Even if you’re just supplying to the UK, a stronger Sterling makes imports and competition tougher. The workers will be hit with a declining quality of life unless they can be compensated by lower cost housing and reduced taxes.

      1. The Prangwizard
        November 7, 2021

        Most of our manufacturers and retailers, distributors and service industries are foreign owned. All the profits and surplus cash is sent to their overseas owners. All good business according to Tories, including our host since he supports ‘inward investment’.

        They have sold us out. They see the UK as a prostitute and they are the pimp. Give us your money and we will do anything you want from us. See it again with greenery. That’s the Tory slogan on sovereignty.

        1. a-tracy
          November 10, 2021

          Prangwizard, you’ve got to wonder though just how the German supermarkets are cutting prices for people so much and why British supermarkets can’t touch them, their Christmas food magazine is amazing like an M&S copy for less than half the price, is it by escaping UK taxes? Does the German supermarket still have workers self-employed?

  15. Bryan Harris
    November 7, 2021

    Perhaps a hint can be gleamed on why contradictory policies are being pursued when we consider this report of COP26 from CFACT:

    “If there’s one thing that unites the UN conference in Glasgow, it is that everyone wants a piece of you.

    Apparently what is troubling the Earth is that you are too free and live too well. Plans to curtail your freedom and redistribute what you’ve worked for into more deserving pockets abound. That none of this will meaningfully alter the temperature of the Earth doesn’t enter into it.

    A UN climate conference is a place where (named) pushes his “Green” investment company’s plans to grow rich from taxpayer subsidies, all the time donning an unearned mantle of virtue. The WSJ once wrote that (named)has amassed a vast fortune without ever conferring value upon a customer.

    A UN climate conference is also a place where Socialists feel free to emerge from the shadows to boldly attack free-market Capitalism, as if their failed ideology were not responsible for suffering throughout the 20th century on a never-before-imagined industrial scale.

    It should be obvious, that whether we are talking about MMCC, the pandemic or national economics, they are all being aligned for one purpose.

  16. Atlas
    November 7, 2021

    I have a suspicion that the real reason that QE continues and interest rates held at near zero is because there is a high level of bad investments out there and raising the interest rate would expose them. The banking crisis of 2008/9 is still with us as a ‘swept under the carpet’ spectre.

  17. Nottingham Lad Himself
    November 7, 2021

    There certainly will be a squeeze.

    The OBR has calculated that the impact of brexit on the economy will be twice as bad as covid19, but unlike that, effectively permanent.

    The fact that Michael Fish once said that it would be “very, very, windy” rather than “hurricane force winds” has not discredited the Met Office, incidentally, and rightly so.

    1. Micky Taking
      November 7, 2021

      Poor Fish – all down to zero communication from the French. We are still not learning.

      1. hefner
        November 8, 2021

        What a curious comment. In October 1987, there were plenty of Meteosat-2 pictures available every 30 minutes (for both the window channel at 11 microns and the water vapour channel at 6.3 microns) that from the 14 in mid-afternoon were showing that some nasty feature on the Atlantic was likely to come to Brittany and South England from the SW. Knowledge of details of cyclogenesis was not as advanced in those days as it is now. MeteoFrance might have been a bit less surprised than the MetOffice, but to claim that it is ‘down to zero communication from the French’ is purely and simply idiotic.

  18. Donna
    November 7, 2021

    Johnson hasn’t got the guts to cancel the NI increase he should never have implemented in the first place.

    The legions of left-wingers in the BBC, Sky, ITV, C4, most of the papers, the NHS, the Quangocracy and Charity-Quangos, the 450 or so sitting on the Green Benches and the 600+ in the House of “Lords”would howl about Nasty Tories; starving the NHS of funds; killing Granny in her Care Home etc.

    We need a Thatcher. We’ve got, at best, a Heath (apart from the obsession with the EEC).

  19. Stephen Briggs
    November 7, 2021

    The task of money management is certainly not easy especially when you’re actually just managing currency not money. Money is a medium of exchange and a store of value which the pound certainly isn’t. All governments have been debasing their currency for so long we’re getting to the end stages of the ponzi scheme now hence the new interest in digital currency. That will be the ideal means to extract and plain steal wealth to keep the ruling class in champagne for a bit longer. It will also have the benefit of dovetailing into the social credit score/ medical apartheid nightmare we are being pushed into. I’d ask how you and your fellow politicians sleep at night but I know that is never a problem for a certain kind of person.

  20. a-tracy
    November 7, 2021

    “Savings are high, so many people could afford to spend more if they wish.”

    Sorry John, but people can’t spend with your government in charge with a spendthrift PM unless they have a final salary public sector (or old public sector) guaranteed pension. There are no protections, all governments just come in and change the rules to suit another secret agenda – government changed the retirement age on people a national insurance funded contract just changed sorry waspi’s, you’re changing the prescription charges for the English only (your party need to remember your supporter base and which part of the Union they live in because you’ve just gone too far and its reached its tipping point) – its just pathetic the worry you are piling on to people in England now. My parents in their 70’s are too scared to spend their savings. It’s like the guy in the dessert who dies of thirst with water in his bottle because he’s scared of running out. They’re scared you’ll put their council tax up too high and fuel rises too high for their basic pension income to cover, you have lost their trust and they don’t trust Labour either, the likes of ageist Andy on here typify the labour movement in regard to older people, that message is coming over loud and clear and you should be glad it is otherwise you’d get wiped out because like Labour in Scotland people don’t want to be taken for granted.

    We aren’t picking our MP the party picks them and then we’re forced to vote for the parties choice when some excellent local advocates loose out.

    1. Hope
      November 7, 2021

      +1
      A.T,
      This is how the prudent are victimised, emotional anxiety because they are responsible people trying to do the right thing off their own backs- conservatism. While criminals who travelled here illegally in the knowledge four star hotels await them! And grandstanding socialists want to give away more of our taxes on overseas aid than looking after the elderly here. That is the reality of JR’s socialist party for you.

    2. matthu
      November 7, 2021

      Let’s hope we never end up with a programmable central bank digital currency then, or the rules would be changing on a daily basis as they nudge you to forego foreign travel, punish you for having an ancestor who was a dairy farmer and make it impossible to pass on any inheritance.

  21. acorn
    November 7, 2021

    It’s like this. The Treasury sells a Gilt to the market in exchange for its own monopoly money it previously created and spent into the economy.

    The BoE then offers to swap Gilts in the market, back into the Treasury monopoly money (call it cash) that bought them originally, guaranteeing a capital gain for the holder (called quantitative easing QE).

    The cash (called reserves by the BoE) has to find something to buy that produces an income.

    The cash buys shares and property that produce a dividend / capital gain; hence, pushing up the price of those shares / properties and consequently reducing the potential dividend yield. (QE was meant to make it easier for business to borrow having now a higher market value to loan ratio.)

    Meanwhile, the BoE has its prime interest rate close to zero. Households with cash they are too frightened to spend, stick with interest yielding accounts that will likely get higher yields when the BoE jacks-up interest rates that they could spend but will probably save.

    Other investors looking for dividend / capital gain yielding assets, are stuck in a “liquidity trap”. They know that at near zero BoE interest rates; they are likely looking at a capital loss on anything they buy, when the BoE jacks-up rates. Might as well take a billion dollar punt on a start-up fusion reactor on the moon that can turn dog crap into hydrogen. 😉

    1. hefner
      November 7, 2021

      An ISA portfolio of (not so recent) start-ups on the AIM can do reasonably well, and if the UK companies in it qualify for BPR, such a portfolio at its holder’s death is not part of IHT calculations, and heirs would benefit.
      So the situation might not be so dire, it depends what one wants to do with their money.

  22. agricola
    November 7, 2021

    This is a subject that is beyond my knowledge base though I recognise the effect it can have on the cost of everyones living.
    I was more taken with sleepy Joe post COP26. We know of his disdain for the UK, his bizarre interpretation of the NI Protocol based on some trace of the Liffy in his veins. He seems to have a preference for the duplicity of the EU. His recent flatulence seems to stretch the limits of any special relationship. How fortunate it was that our Queen did not have to suffer his lack of control. He can consider himself lucky that her husband, the dearly departed Duke of Edinburgh was not present, he might have demanded a full 21 gun salute, or something equally pithy.

  23. DOM
    November 7, 2021

    A private person’s monetary savings do not exist to finance economic activity encouraged by politicians and the grubby political State to prevent economic contraction and thereby protect the status quo. Economic implosion undermines the power of the political class and in many cases sweeps them aside.

    When debt consumes the west and triggers meltdown the State will try and seize our assets by whatever means

    It is important for private persons to build up their hard assets to insulate themselves from the power grab now being carried out by the Build Back Better perps and pharma zealots who see a once in a generation opportunity to remodel and realign the person’s relationship with the State and to drive through fundamental changes to the demographic nature of the UK

    It is genuinely upsetting and very worrying to see decent and honourable Tory MPs or indeed any MP endorsing this revolutionary movement whose purpose is nothing less than obliteration of all that we have known

    Tory and Labour voters are dragging our nation into a dark place

    1. fascinated
      November 7, 2021

      There’s one of 3 reasons Politicians are out of kilter with the common (wo)man
      The first is that they are so busy ( doing good !) they dont have time to explore outside their own sphere.
      The second is that they have a shady past
      The third is money.

    2. John C.
      November 7, 2021

      Well said, Dom. Johnson especially has no understanding of the worry that is growing. People always used to equate Conservatives with stability and support for the hard-working. That has now just vanished in a few months.

    3. No Longer Anonymous
      November 7, 2021

      +1

      The vast majority of people don’t need pills. What they need is a Joe Wicks diet plan and a regime of micro workouts using compound strength training and a bit of high intensity cardio. Build up from 10 minutes a day to whatever the ‘patient’ would like to do.

      The effects are staggering.

      If these simple and do-able (for most) measures could be contained in a single pill people would pay thousands for it.

      No need for fancy equipment, electronic mirrors, home treadmills or gym membership.

      Press ups, chin-ups (band assisted) and deep bodyweight squats and lunges. ESPECIALLY into older age.

      Proper Tibetan meditation too… and a bit of therapeutic litter picking in fresh air as well.

      1. No Longer Anonymous
        November 7, 2021

        Pertaining to the pharma giants comment. I agree. Masking symptoms is a big business, whereas the honest way of dealing with the illness is absolutely free.

  24. Roy Grainger
    November 7, 2021

    As the public sector pay increase cap has been removed it is inevitable pay will increase rapidly, particularly with the BoE predicting 5% inflation next year. 5% now becomes the baseline and public sector unions will demand more than that, and they’ll get it too from this supine government.

  25. peter
    November 7, 2021

    All these economic comments etc are all fine and dandy, BUT the BOE has been given the single remit of inflation at 2%, something it has woefully failed on. This is 2 % now not some indefinite time in the future. The Governor has to report monthly or quarterly (as it has been allowed to slip to) on his failure and why he has not achieved that.
    Politicians and the BOE are now trying to change their own rules to allow each to pontificate sagely on the outlook, growth, the price of vegetables etc etc with little recourse. Interest rates may well not be a keen enough tool to control inflation but that is what both sides signed up to. Absolutely typical flannel from both now akin to Nero’s fiddling!!

  26. No Longer Anonymous
    November 7, 2021

    Got to keep the housing ponzi going. It’s the only show in town.

    (Dare we tell anyone that the notional value of the UK is a mirage ? That the assets on which our debts are based cannot be realised in any realistic time scale or else they lose 70% of their current valuations ?)

    1. Nottingham Lad Himself
      November 7, 2021

      Yep.

      1. No Longer Anonymous
        November 7, 2021

        Appreciated, NLH.

        1. Micky Taking
          November 7, 2021

          get a room. How far is Cardiff?

  27. Stephen Reay
    November 7, 2021

    QE doesn’t work ,if it did we wouldn’t have needed this time around . The BOE is like a drug addict, but hooked QE rather than cocaine.
    Low interest rates have never helped home buyers, all it does is creates demand and forces up prices , and with help to buy ,low stamp duty it just compounds the problem.

    Those with mortgages can afford an increase in rates as they would have been stress tested up to 5% when they applied for a mortgage. If mortgagees fix now if could be many years before they face an increase in their mortgage costs, and their income may have increased in that time.

    The BOE is letting the country down by allowing inflation to increase. They have apologised to the general public but need to apologise to savers for their systematic theft.

    The rich have got richer through share prices and multiple asset increases such as homes at the expense of savers. It time for the BOE to be bold and not sit back an wait and see what the rest of the world does . The MPC members need to keep their views to within the MPC meeting as they could be benefiting from what they say publicly.

  28. Mike Wilson
    November 7, 2021

    Mr. Redwood – how did you vote in the ‘save Owen Paterson’ affair?

    1. rose
      November 7, 2021

      It was not a Save Owen Paterson affair. It was a chance for Parliament to reassert itself as the highest court and teach an unelected, unaccountable, unqualified quangocrat the importance of due process. It was not a vote to block the suspension, as the media keep telling you, but to delay it; Parliament was not pronouncing on guilt or innocence, but on process. This particular case was the last straw, because there had been others, funnily enough all Brexiteers. The unfit one was appointed by Xxxx Speaker Bercow in the middle of his campaign to reverse the biggest vote in our history. And she had let off the Chairman of the Standards Committee – in an extraordinary contrast with this case. Perhaps because he is a Labour Remainer.

      1. rose
        November 7, 2021

        What a pity then, that Thangam Debbonaire sank to the occasion, as low as she could possibly go. Instead of going for much needed reform which would have benefited her party in the long term, she settled instead for lurid headlines in her party’s short term interest. Eventually, the truth will come out.

        In the meantime, this affair is playing out like the assassination of Sir David Amess in which we were deflected from talking about islamist terror and what to do about it, on to how to give FATGA yet more power to censor people they disagree with, using the magic word “harm”. This time, we have been deflected from talking about the shortcomings of the Parliamentary watchdog, on to how to get rid of the PM – again. The holiday is being wheeled out for example. But I seem to remember Mrs T staying in a friend’s Swiss castle most summers and it not being a problem. As for Blair’s sojourns in various billionaires’ properties, of course that wasn’t a problem. This is a synthetic campaign being got up, again.

  29. Mike Wilson
    November 7, 2021

    Savings are high, so many people could afford to spend more if they wish

    Sorry, but this is a typical comment from a member of the out of touch elite.

    Let us consider MPs:

    Salary £81k
    £23k rent paid plus another £4k if living in London
    £188k for staff (and they can employ wife or their own children)
    £28k office costs
    £18k Covid payment
    £57k winding up costs if they lose their seat
    £13k Compensation payment if lose their seat
    £70 Golden handshake when they lose their seat
    Plus Pension – up to 1/40th of final salary for each year served.

    Let us consider most people.

    No savings
    Live month to month and could not last a fortnight without their wage.
    In debt.

    For them it was right not to raise interest rates. Their lives are hard enough as it is.

    1. glen cullen
      November 7, 2021

      You can see it, I can see it, we can see it… but MPs can’t see it

    2. No Longer Anonymous
      November 7, 2021

      It’s a highly competitive role. Probably harder to achieve than a premiership footballer.

      I’d gladly pay MPs more if they had any actual power.

      1. Micky Taking
        November 7, 2021

        I’ve said before – 100 varied experience, mixed age and appropriate diversity as MPs – no whips.
        Salary £150k?
        Abandon the 650 playground scraps, and the 1000 sleepers in the Other House.

  30. Fedupsoutherner
    November 7, 2021

    Well it didn’t take long for John Major to disappoint with his comment over the NI protocol. Idiot.

    1. rose
      November 7, 2021

      Were you disappointed too with his remark on Prorogation? Boris’s was in the national interest but Major’s was (in the Daily Mail’s parlance of those days) to avoid questions on sleaze. The man is an embittered fool. He has learned nothing and forgotten nothing.

  31. Derek Henry
    November 7, 2021

    Hi John,

    If raising interest rates actually fight inflation

    1. Why has the Eurozone and Japan suffered from deflation for decades with zero and negative interest rates?

    2. Why did the BOE slash interest rates and do QE ( remove £billions of private sector gilt interest income) out of the economy straight after 2008 and the pandemic because they were scared of inflation ?

    Because if the BOE can convince you and portfolio managers that the opposite is true of what they know is true they can offer the market reaction. They do the same with tax rises.

    One of the characteristics of political and diplomatic skill is to let people believe you have heard them and will be addressing their concerns, regardless of whether those concerns make any logical sense. The trick is to first agree with them, and then slightly pivot to where you want to be.

    So at the moment there is much genuflection towards the economic orthodoxy and the common belief. We see statements such as

    “The Treasury now rightly says we cannot go on with the excessive borrowing and very high levels of state spending needed during lock down.”

    And

    “We have a black hole close to £400 billion at the moment. That’s not sustainable and no one should feel comfortable about that being sustainable.”

    Of course better informed people know both these statements are incorrect. Borrowing is caused by people saving, and people saving and not spending is always sustainable because, well, they’re not spending. There’s not even any need to pay them interest to do so. They will save anyway for insurance, status and liquidity purposes.

    But the true believers have to be appeased. So what is a central banker to do? How can they square the circle?

    Well the approach is to announce tax rises across the board to ‘bring down the deficit’ and ‘plug the gap in the finances’ – the usual rhetoric. However, to give people time to adjust, those taxes are to be delayed for several months.

    The intent is to lay down a threat that taxes will rise, which satisfies those who want to ‘pay off the debt’ (aka confiscate people’s savings), but also adjust expectations so that spending is brought forward to avoid the effects of the tax rises.

    In the late 1980s delaying the cancellation of double MIRAS (removing a tax relief is a tax rise) by six months helped trigger the Lawson Boom. It seems that the UK chancellor is hoping that the same effect can be used to drag the UK out of a post-Covid slump.

    And if it doesn’t happen, then the proposed tax rises can be cancelled or delayed “due to prevailing economic conditions”. Even if it does the tax rises can be cancelled “due to the unexpected recovery in the financial position”

    They do the same with interest rates. As the insiders know increasing interest rates cause inflation at the margins. The increased cost of borrowing just gets passed onto consumers via higher prices. The increased
    Interest income via the interest income channels is a fiscal stimulas.

    As a political play it is a win-win.

    Draghi’s whole central bank stint was a master class in doing exactly that. He convinced the world’s portfolio managers into selling euro by doing things that they think are inflationary, but they weren’t inflationary at all. If the portfolio managers knew the truth the Euro would have got stronger which is not a good thing when the continent has chosen an export your way to growth model.

    The strong currency kills your exports.

    In addition to that using the actual accounting that takes place – Starmer’s Bonds Won’t Raise a Single Extra Penny.

  32. Blithespirit
    November 7, 2021

    Am afraid the PM is not at all as he would like to portray, nor not quite Churchill either as he would like to pretend but more like Turkish sleaze, not one of us really..

  33. Original Richard
    November 7, 2021

    Deciding whether or not to change interest rates or other similar fiscal measures is akin to moving the deck chairs around on the Titanic compared with dealing with the fifth column in our midst determined to :

    – Encourage large scale immigration including even inviting the invasion of 20K+/year and rising each month of unidentified men of fighting age by offering them 4 star hotel accommodation, £30/week pocket money and complete freedom to roam our streets.

    – Implement unilaterally net zero CO2 by 2050, despite not having the technology to achieve it other than by exporting our industry and increasing energy production overseas and with no impact assessment whatsoever.

    – Promote the cancel cult to end freedom of speech and thought.

  34. Helen Smith
    November 7, 2021

    I’m sick of subsidising the profligate, people over borrowing got us into this mess but savers were the ones penalised, that was nearly 15 years ago, 0.01%, that the rate you get on easy access savings, utter disgrace.

Comments are closed.