It is widely expected that the Bank of England will raise interests rates today : why is this wrong to do so?

This post has been made in response to Kevin Peachey’s article that appeared today on the BBC’s App and website  .It is widely  expected that the Bank of England will raise interest rates today in order to tackle Inflation. This is a very predictable text book response to Inflation and seen by many as the preferred method  to tackle  Inflation. The BBC has inferred  that this Inflation is as a result of the lack of goods in the Economy after the Pandemic. From what I remember of the Pandemic is wasn’t goods availability that was problematic it was just that there appeared to be a shift away from people actually going to get goods to a situation whereby goods were being mainly ordered and delivered. Sure enough there was some drop in production but this didn’t impact greatly on availability. There was however more of a drop in services in that sector of the Economy.  However today all I ever see down our street and on our estate is loads and loads of delivery vans constantly  shuffling about and delivering goods to people’s  homes via Amazon and DPD to name but a few. Also I myself  have ordered much since the Pandemic  ended and have enjoyed taking advantage  of one day delivery schemes. So when the BBC state lack of goods as a cause of this current period of Inflation , I simply have to  laugh. I have never recently gone onto the Internet and Amazon, in particular, where I remember being informed that the goods that I wished to order were out of stock. This has been my recent experience.  So where is this shortage of goods driving this Inflation? It simply does not exist but has become an easy  scapegoat to avoid the real finger of suspicion.

The real cause of Inflation is the greedy energy and utilities  companies hiking up profits and disguising these as pass on costs.

Yes if you wish to find the real cause of Inflation just ignore the drivel coming out of the BBC at the moment.  The real cause of this period of Inflation  is the greedy energy  and utilities  companies driving up the cost of all goods by the exploitation  of consumers and hiking up their profits and disguising this by inferred that they are merely  passing on costs. These energy  and utilities  companies  are driving up Inflation  because of their greed and dishonesty and attempts to make quick profits on the backs of consumer’s  misery  and suffering.

Re-nationalise the utilities now to tackle inflation  and the ‘ Cost of Living Crisis’

The Bank of England plan to slow down the economy which  potentially risks leaning over towards a Recession. This fails to address the real cause of the Inflation  which is the greedy and amoral energy  and utilities  companies. Instead the Bank of England’s  plans heap more misery  on innocent  citizens  already  struggling  with the cost of living crisis. This will particularly  hit home hard to those of us with mortgages, putting an increasing strain of wages. This is likely  to result in less consumer spending hence a Recession as goods get produced  but cannot  be sold which in turn leads to less demand and a shrinkage  in the manufacturing sector. Businesses start to consider reducing their workforces  to manage the drop in demand and drop in profits leading to less affluence  in society hence driving a recession. Not a good outcome  and a very risky strategy  by the Bank of England that will not address  the real cause of this Inflation  which again is due to increase costs of goods because of higher costs of transportation  of goods and heating and refrigeration  etc. These are as a direct result of the blatant  profiteering  and greed of the Energy and utilities  companies. It has very little  to do with supply and demand in this case.

Re-nationalise the energy companies and the other utilities  to deal immediately  with Inflation  and the ‘ Cost of Living Crisis’. Once publicly  owned these high inflated prices can be dealt with immediately. Get these companies  working  for the benefit  of the British Public and not against  them as they are doing now ( with contempt).

Tackle the cost of energy and you deal with Inflation instantly. Take these greedy energy and utilities companies back into public ownership and you deal with Inflation. Increased wage demands are as a direct result of the cost of living crisis  being brought  about by the energy  and utilities  companies. Also by aggravating cost and supply chains through inducing a mini recession it solves nothing because demand will remain high but the availability of goods in a recession  becomes scarce therefore costs of goods increases anyway thus driving Inflation  even higher. The proposed and expected, Bank of England’s  intervention  will be misguided at best and possibly  catastrophic at worst.

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