It fits the definition of madness to propose more austerity. But that, along with higher interest rates, is what’s coming
Economic policy in the UK is peppered with the language of S&M. The Treasury demands budgetary discipline. The Bank of England sees the need for monetary tightening. Policymakers talk of the need to avoid “fiscal dominance”. Only in Britain could there ever have been an instrument of monetary control known as the corset.
Judging by the way in which the Treasury and the Bank are behaving, it’s easy to see why the novelist Anthony Burgess once described the English as “profoundly masochistic”. A great deal of self-inflicted pain is about to be administered, but for its victims there will be no pleasure involved.
Larry Elliott is the Guardian’s economics editor
