Cutting in a downturn has been long discredited. And yet that’s what the government is doing
Learning no lessons, repeating the same failure over and over yet expecting a miraculously better result, the Bank of England might just as well be advocating a return to the gold standard. Raising interest rates as the UK is facing its longest recession since records began is no way to repair the damage done by Trussonomics and the longer effect of George Osborne’s crippling austerity, and it is no way to breathe life into a stagflated economy.
The increase of 0.75 percentage points – from 2.25% to 3% – is the steepest rise since 1989. Millions of mortgage- and rent-payers alike will be hit hard, on top of falling real wages and rising costs of everything. An Ipsos poll for Sky News finds that more than a quarter of adults have started using credit cards to buy food – and a fifth have borrowed money to adjust to rising prices this year. Inflation has hit a 40-year high.
Polly Toynbee is a Guardian columnist
