Tiny interest rate hike made for all the wrong reasons
DON’T know about you but over the years I have always assumed the governors of the Bank of England knew what they were talking about.
But the current governor Mark Carney has proved me wrong in my belief that a man who takes home £880,000 a year of public money would actually be worth it. In all honesty, I wouldn’t trust him to run a swear box in a Tourette’s clinic.
The problem is that his job is supposed to be non-political. And Carney is clearly a highly political man who has betrayed his role’s supposed impartiality by being such a vigorous backer of Project Fear.
Every time he opens his mouth, it seems, he talks down the economy. He was at it again yesterday, putting the wind up the money markets with dire warnings of making plans for a recession if there is no Brexit deal, a spike in interest rates, a crash of the housing market… on and on he went until, not surprisingly, there was a run on the pound.
Embarrassingly, he was forced to backtrack and declare “No, no, no, no, no, no, no (seven nos, I counted them) we won’t be in that situation.” If so, why mention it except to reinforce his Remain beliefs?
QUITE frankly, I don’t want a central banker who’s either pro-Brexit or pro-Remain. I want someone with a cool head who concentrates on concrete issues such as what is he going to do to help savers?
By allowing banks to get away with charging more to borrowers (when Carney and his committee put up interest rates) but not forcing them to immediately pay higher interest to savers, he is, in effect, legalising larceny.
It is a step down the road of economic ruin, because a country which does not save for a rainy day will drown when the bad weather comes.
For years savers have had to put up with dismally low rates.
There must have been hollow laughter across the land when a spokesman for the banks tried to defend their stinginess by saying there are lots of special offers on the market which offer a return which is higher than inflation. You try taking up those offers. They disappear in about half the time it takes you to close your old account and open a new one.
The bankers are making mugs of us – and they take their lead from the man at the very top. What exactly is his strategy? Does he have one other than to do all he can to paint Brexit in a bad light?
The Bank has kept interest rates at record low levels ever since the recession struck in 2009. Fair enough, the economy needed a major boost back then. But the big mistake was in keeping rates at rock bottom for too long. It’s staggering that the economic geniuses running our finances couldn’t see that all they were doing was encouraging people to take on mountains of debt on credit cards, hire purchase and car loans.
As a country we were just storing up trouble for the future.
But what did Carney do? After the referendum went the “wrong” way from his point of view, he cut interest rates even lower because he believed his own propaganda nonsense about jobs being destroyed and the economy grinding to a halt.
We know now that Project Fear was all tosh – in fact, most
ALOT of us can remember what happened the last time we trod this profligate path. Back in the late 1980s we borrowed more than we saved and the resulting consumer boom fuelled an almighty crash as the bubble burst. Loadsamoney became Loadsapain.
Never more so than on Black Wednesday in 1992 when John Major’s government (for want of a better word) presided over interest rates that shot up from 10 per cent to 15 per cent and back down to 12 per cent in the course of a few hours.
Surely we must have learned lessons since then? One is that saving needs to be made worthwhile or money loses all value. Another is that taxes need to be cut so people have more money to invest, not splurge.
If the Governor of the Bank of England is so worried about Brexit, he should be advising the Conservatives to cut public spending so personal taxes can be lowered and to cut business taxes so we become an even bigger competitor to the sclerotic EU – an offshore version of Singapore. Then we would be able to afford more sensible and fair interest rates.
‘He was talking down the economy again’