Inflation ?

[Observer II]

As the Bank of England increases interest rates again,  political panic ensues for those with current mortgages.  The Tories appear to recognise the independent role of the BoE, in setting the rate in order to counter inflation.   However, the opposition seem to have been schooled into parroting the same " The Tories have had 13years to lead us into this mess" without any constructive proposals to the contrary.   Of course ignoring the fact that they left office with a note, saying there was no more money left, which then led to 10 years of austerity, to balance the books.   Bad as it may be, the idea that Labour has any viable alternatives to the Tories is laughable,  Starmer changes policies every week now, searching for any policy that may gain favour in the polls.   The Tories believe in a home owning democracy, which has always been unaffordable for most working class folk;  and interest rate rises are a consequence of borrowing; yet Labour now talk about "helping" home owners with interest rises.   However, renters are also being priced out of accomodation as private landlords seek to fund their own mortgage payments.   Throughout this debate, no mention by Labour of Social Housing provision however, as they don't want to scare voters, a most untrustworthy crew if ever there was one.    

[Observer II]

As the Banks increase interest rates on borrowing, in line with inflation,  what they are not doing, is increasing the interest rates for savers, who have been ripped off for years by the Banks.     😠

[ninearches]

Call me thick, but I don't understand how hiking interest rates helps the economy. Surely interest rates should be reduced to allow the public to have spare money to spend in the wider economy. Businesses would survive & jobs would not have to be lost & HMG would do very nicely out of VAT receipts.

[Observer II]

i think it's about too much money chasing too few goods Dave.   If supplies reduce, their price increases; so the energy costs for example, caused by our sanctions on Russia and a stupid adherance to net-zero, knock on  to food prices etc.  More money just feeds the monster,  in Weimar Germany they were taking their wages home in handcarts. However, rather than restricting the money supply, the US employs Quantative Easing, which just means printing more money and accumulating more debt, which they pass on to other countries using the Dollar.