The Bank of England seems flavour of the month with the government; I don’t share their confidence. Their policy of keeping interest rates low has hardly been a great success. Growth is anaemic and inflation has predictably increased. Furthermore, they have decimated the income of a large number of savers, often the elderly. These are people who would otherwise have spent money on retail and services. The Bank’s policy has rewarded the profligate; the very people whose penchant for borrowing got us into this mess. The Governor of the Bank is not taking a salary increase this year, big deal; he earns the sort of salary that allows him to make such gestures. What about savers whose incomes have fallen about 50% this year.
Is it not about time that the government reversed their predecessor’s mistake of giving the Bank of England independence on setting interest rates?
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