The Bank places an oppressive thumb on the scale of economic justice, to guarantee the dominance of extractive interests
The Bank of England’s monetary policy committee will almost certainly raise interest rates for the eighth time consecutively in a year on Thursday, despite the economy heading towards recession. It is not clear why Britain needs its biggest rate hike in 33 years. Making money dearer while the Treasury cuts spending and raises taxes will only deepen and prolong a recession that the country may already have entered. That is probably why the deputy governor, Ben Broadbent, was sent out on the day Liz Truss resigned to argue that rates could not keep rising – as it was a medicine that would hurt the patient.
The timing of Mr Broadbent’s speech suggested the Truss implosion was solely responsible for higher borrowing costs. Yet interest rates were 0.1% this time last year and they are expected to hit 3% on Thursday. Using a rule of thumb, the Bank has imposed a £1,800 annual extra charge per £100,000 of mortgage debt accrued by borrowers. This is a problem as 1.8 million people whose low fixed-rate mortgages end next year will have to refinance them at a higher cost. Rents will also rise. Ms Truss’s incompetence and lack of a believable growth plan deserve censure. But the public would be wrong to blame her for higher rates and fiscal tightening. The Bank and the Treasury own those decisions.
