The Bank of England must stop ‘depending on kindness of strangers’ to bolster the UK economy
“The idea that credit should be cheap, that savings are pointless, and that borrowing levels do not matter, is contrary to common sense. Harm is being done to individuals, to businesses and to the next generation.”
5 February 2017 will be the eighth anniversary of UK interest rates being lowered to 1%. This is unprecedented, as is QE. And this “unconventional monetary policy” is having severe economic consequences, argues Brian Sturgess in Stop Depending on the Kindness of Strangers. Sturgess warns that it:
Unconventional monetary policy has thereby contributed to the widespread and deep-seated sense of unfairness that is prevalent in many of today’s Western economies.
Brian Sturgess suggests that it is time to revisit the question of central bank independence. Independence was not granted in order for the Bank of England to embark on unprecedented and unsupervised monetary experiments. The recent disagreements between Theresa May and Mark Carney, governor of the Bank of England and the question marks that have arisen over the future position of Federal Reserve chair Janet Yellen, demonstrate the political pressures building up as a result of central bank interest rate policies.
Brian Sturgess concludes:
“It is time to grow up. The status quo cannot and should not continue, whether for economic or political reasons. Monetary policy should return to normal. This will expose today’s politicians to difficult decisions, but failure to change direction will only, eventually,result in even greater pain. The small increase in interest rates by the Fed in December 2016 will hopefully be the first step in this process.”
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