Bank Rate rise: It's all the fault of the workers!
Perhaps the governor of the Bank of England, Andrew Bailey, should get
himself booked on to the next series of the radio comedy game show,
Sorry I Haven’t A Clue. Except
this increase in the bank rate is no laughing matter. How much pain,
desperation and despair is it going to take before you shake off
your lethargic support for this social system that is based upon the
exploitation of the majority and you realise that capitalism doesn’t
give a jot about you?
British Tory government, like the New Zealand Labour government,
believes that high interest rates reduce demand and therefore limit
price rises. In March 1984 the bank minimum lending rate was 8
percent Since then it has risen to the present 15 percent. So prices
ought to have stopped rising. Actually they have gone up by 43
percent since March 1984 and are now rising faster than they were
then. Since higher interest rates increase the income of the lenders
by exactly the same amount as they reduce the spending power of
borrowers, why should demand be affected?’
Standard Editors August 1990
the MailOnline, June 22, ‘Andrew Baileytoday
told Brits to stop demanding 'unsustainable' pay rises
after the Bank of England ramped up interest rates in a bid to curb
governor warned that the current level of wage settlements 'cannot
continue' as he defended heaping misery on mortgage-payers by raising
the base rate from 4.5 per cent to 5 per cent.
to broadcasters after the bombshell move - far bigger than the 0.25
percentage point hike analysts have expected - Mr Bailey denied that
he actively wanted to trigger a recession.
he made clear he will do 'what is necessary' to bring inflation back
to the 2 per cent target - less than a quarter of the current
wage settlements are among the factors that have spooked the markets
and forced the Bank's hand, although it has been heavily criticised
for failing to act early enough to combat prices.
whether people were asking for too much, Mr Bailey - who earns around
£575,000 a year - said: 'Let me be very clear on this, because it's
an important issue.
got to get and we will get inflation back to its target.
do that I have to be clear – and we expect inflation to come down
this year – to do that we cannot continue to have the current level
of wage increases,
we can't have companies seeking to rebuild profit margins which mean
prices continue to go up at their current rates.
what I would say to people is we expect inflation to come down, and
it is important then that price setting and wage setting reflects
the current levels, I'll be absolutely honest, are unsustainable.'
mounting panic in Tory circles, Rishi Sunak voiced support for the
Bank's tough action. He also tried to cool concerns with a folksy
town hall event performance insisting he is '100 per cent on it'.
Jeremy Hunt also offered gave strong backing to the Bank, saying
controlling prices is the 'only long-term way to relieve pressure on
families with mortgages'.
we don't act now it will be worse later,' he added.
Bailey has been coming under intense fire for failing to respond to
inflation earlier, with some Treasury advisers arguing that
Threadneedle Street now has no option but to force a recession...'