Inflation Mark Carney fault
In an interview today the bank of England governor admitted that he is helping make the poor of the UK poorer by his policies.
Let’s be clear on this, the decrease in interest rates since Britex by the Bank has helped push sterling to unprecedented low levels against the major currencies in the world, the dollar and the Euro to name but two.
Apparently Carney said sterling’s fall “helps the economy adjust” and those on low pay “it’s going to get difficult”.
Let’s us note that one way of reducing high levels of national debt is for inflation to erode the real value of it, this is a political move from a so called independent Bank who’s dresses up inviting inflation into the UK with the clothes of “supporting economic growth and jobs”.
Inflation and real wages
So when we have 5% inflation and 2% pay rises and people in real terms are 3% a year worse off, we can expect Carney to add to people’s misery and raise interest rates? The “forward guidance” he has given in the past was as helpful as a chocolate tea up at a chimp’s tea party.
Our view is Mr Carney should have done what he said in his pre Britex speech, interest rates will have to rise if we vote to leave, and raised them. Instead lowering interest rates has already caused “MarmiteGate” with a public row between Tesco and Unilever over increasing prices, however we in the UK are going to be poor, on holiday (just look at your exchange rates) and at home as we are an importer country, and before the masses start saying that’s the problem we all need to manufacture more here, well until everyone is willing to work for the same amount as people get paid in China and India, it’s not going to happen.
Mr Carney said that the Bank of England was willing to see an "overshoot" of its 2% inflation target if it meant supporting economic growth and protecting jobs.
The British jobs market has done well, and is actually showing no signs of not doing well so for him to make a “fag packet” calculation and say “400,000 and 500,000 jobs could have been at risk if the Bank had not taken action after the referendum” is non sense, what we know is protecting jobs doesn’t mean lowering real wages.
Here’s what Carney said "We are willing to tolerate a bit of an overshoot [on inflation] to avoid unnecessary unemployment. We moved interest rates down to support the economy." Yet savers who’s money is earning 0.25% at best are facing a real drop in the value of their money, this is not supporting the economy, neither is lowering the real wages of people by inviting inflation into the UK.
Weak Pound not all down to Britex
Mark Carney is not even British, why does or should care if we have a strong pound? He clearly doesn’t. History will show that it was a mistake to invite inflation into the UK economy and lower interest rates, and this is not Britex fault let us be clear on this, he had a choice and made the wrong decision.