This post has been made in response to Kevin Peachey’s article that appeared today on the BBC’s App and website https://www.bbc.co.uk/news/business-57764601 .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.
The Bank of England’s Inflationary tactics may set Britain on a course for Recession
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. 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.
To read more on this topic http://havemysay.me.uk/energy-companies-and-utilities-are-laughing-at-you-all-the-way-to-the-bank