The Bank of England Had to Say Something
Everyone insisted that the Bank of England (BoE) needed to say something following the financial turmoil that began on Friday and continued over the weekend. The BoE has now spoken. Sounds pretty dovish to me.
The role of monetary policy is to ensure that demand does not get ahead of supply in a way that leads to more inflation over the medium term.
This statement is sure to surprise/confuse/outrage/reassure investors everywhere.
Mention of the Office for Budget Responsibility is code for balanced budgets or at least deficits not increasing much.
Mention of not hesitating to hike interest rates to return inflation to 2% - regardless of the source of that inflation, is code for we prioritise more wealth for the few over wealth for the many, or at least we will bludgeon the economy with high interest rates if the government refuses to fight inflation using fiscal austerity.
The BOE needs to be purged of liars about the sources of inflation and how best to deal with that inflation, the wreckers of the economy, and the enforcers of ever more neoliberalism and financialisation of the UK and global economies.
I seems fairly obvious that the current inflation problem is not due to interest rates being too low or government spending being to high. It is more likely to be related to corporations taking advantage of supply problems to increase prices and make windfall profits.