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Written by Austin Mitchell
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05 July 2007 |
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Today’s daft decision of the inflation crazed Bank of England to raise interest rates yet again shows that our inflation hawk of a Governor, who’s been constantly warning about inflation and bullying the reluctant doubters on the Monetary Policy Committee into voting for yet another rate increase, has finally flipped.
Britain’s short term rates are already higher than those in the Euro Zone, Japan and the US. To put them up yet again (this is the fifth time) at a time when the main inflationary pressures come not from wages but food, fuel and utility prices unaffected by high interest rates, will inflict deep damage on the British economy.
It will make worse the over-valuation of sterling which is so crippling to exports and manufacturing, and ruinous to our balance of payments.
It’s disastrous for the high street where many stores and chains are already struggling. It is oppressive for home owners crippled with heavy mortgages. It will hold back the investment we need and increase all costs in the economy.
The answer is to fire our inflation hawk governor, stack the monetary policy with devaluationists, widen the inflation rubric and join growth and exchange rate competitiveness to it
But, being essentially moderate and still hoping for a job as Labour’s emissary to the City, I’ll restrict myself to saying gag the governor to stop him banging on about his personal war on inflation and make him Governor of the European Bank. So he can bugger them up. Not us. |
