The reason interest rates in the UK can’t rise isn’t because of global issues or low oil prices (although they certainly play a part) – it’s because most people in the country don’t have the disposable income necessary to make the purchases that would push money through the system.
Here in Mid Wales, as This Writer reported a short while ago, wages have risen by around 10 per cent since 2008 – while inflation increased by twice as much. Therefore there has been a real-terms wage fall of around 10 per cent, in an area where average income was already only around 76 per cent of the national average.
This is a direct result of Conservative Government policy (and that of the Coalition before it – both headed by David Cameron and George Osborne).
There will be no substantial economic improvement while the Conservatives are in charge. They don’t want it.
If matters continue as they are, the Tories will be able to use the continued economic sluggishness as a reason to cut more public services.
The added bonus is that low interest rates also hit savers, meaning even people who have had a nest egg in the bank will end up having to dip into it to stay alive, while their capital will not be replenished by interest payments.
The Tory plan to impoverish the UK (apart from their friends) is right on course.
The Governor of the Bank of England has ruled out an immediate rise in interest rates because of the turmoil in the global economy and weaker UK growth.
In a gloomy assessment of the state of the world, Mark Carney said that collapsing oil prices and an “unforgiving” global environment meant that tighter monetary policy was not yet necessary”.
Mr Carney’s assessment comes six months after he suggested that a rise in interest rates would come into “sharper relief” at the beginning of 2016.
Many assessed that as a signal that rates would start rising early this year – a relief for savers who have struggled with historically low interest rates since the financial crisis.
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