Tag Archives: bank

Interest rates stay high so you’ll carry on paying more for less

The Bank of England: it’s keeping prices high.

Any questions?

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These new inflation figures should be awkward for the Tories

Inflation has dropped to 6.8 per cent – but this is not an endorsement of Conservative government policy.

The Tories have spent months claiming that they cannot pay the money they deserve to public sector workers (including the junior doctors who were on strike over the weekend) because it would worse inflation – but today’s fall comes alongside an increase in average pay.

Looking at the small print, we see that none of this pay rise has gone to people who actually need it; instead it has further fattened the bloated bank accounts of high-paid company executives and other friends of the Conservative government.

But that doesn’t matter; wages have increased and inflation still came down. The Tory lie has been exposed as – in the language of Peter Stefanovic – bollocks:

The clip includes a few other interesting take-outs:

Workers in the UK are ÂŁ11,000 a year worse-off.

2022 was the worst year for wage growth in almost half a century.

Average real wages in the UK will still be lower in 2026 than they were in 2008.

So it is impossible for public sector wages – or any other wages paid to employees – to have had anything to do with inflation figures.

In fact, according to the extremely non-socialist International Monetary Fund, the largest contributor to Europe’s inflation over the past two years was rising corporate profits cause by companies increasing their prices by more than the costs of imported energy. Look at your own energy bill over the past few years and compare the increases with the costs of energy and you will see the factual accuracy in this.

Increases in private sector wages may increase the price of goods – because companies would factor those rises into their prices.

There is evidence of this in the new figures: strip away the cuts in energy and food costs and core inflation is one per cent higher.

But that doesn’t happen in the public sector where, for example, healthcare is free at the point of use.

And the public sector labour force is only 17 per cent of the total workforce, meaning its pay increases have a lower effect than anything happening with the 83 per cent in the private sector.

Of course, prices are still increasing, meaning that people will blame that on increasing wages and demand another interest rate rise from the Bank of England to curb spending by the little people (you and me, as opposed to the big bosses who have actually received the pay boosts).

I struggle to grasp the point of such a move as it is more likely to cause a recession than stabilise the economy. The precipitous rise in interest rates set by the Bank has not affected inflation at all, and conventional wisdom suggests we will not see the result until 18 months after the first one was imposed. With inflation already coming down of its own accord – as was widely predicted by people like economist Richard Murphy – this could be disastrous.

So when the Tories come out with outrageous nonsense like this…

… I am glad to see responses that put it into the proper perspective, like this:

Sadly, the message is unlikely to get through to the general public, thanks to the biased priorities of our right-wing social media platforms. Look at the number of views the Tory propaganda has received, in comparison with those collected by Clare’s response.

Finally: at least someone out there can laugh about it. Read this:

Sadly for the story, even though the Royals are technically working in the public sector, they are right at the top of it, so their pay rise comes in as equivalent to those of the fatcat company execs.

Still, I don’t see anyone talking about the inflationary effect of this massive increase, so it adds to the evidence that public sector pay does not affect inflation and the Tories have been feeding us bullsh*t since the public sector strikes started, if not before.

Try to remember this amid the barrage of inadequate and misleading reporting by the BBC and the rest of the Tory media.


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Outrage as banks announce huge profits

The Bank of England: it raised interest rates, supposedly to combat inflation – and now the banks have made a fortune in profits and inflation hasn’t fallen significantly.

After the energy firms, the banks.

Interesting how it goes, isn’t it?

The energy firms put up their prices for no very good reason (remember: the actual cost of gas and electricity is much, much lower than the amount you’re paying for it. The corporations say they keep the price up to smooth out any sudden shocks as the price comes down but they never refund the extra amount that you pay after the final costs are known).

This causes inflation.

The Bank of England then acts to reduce inflation – by increasing interest rates.

This creates a huge profit for the banks.

This profit is also never refunded.

Inflation has remained high.

Cue outrage:

Logically the answer is a windfall tax and curbs on profiteering and executive pay.

I wonder if Rishi Sunak’s new Business Council will recommend that to him?

Who’s on it, again?

SSE, Shell – they’re energy companies; Barclays is a bank…

That’ll be a “no”, then.


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Is the Bank of England trying to force the UK into austerity? Why?

The Bank of England: don’t believe its claims about inflation.

If the Bank is trying to force the government into austerity by selling government debt at a loss, isn’t that political interference?

And isn’t anyone – of any political organisation – going to ask the obvious questions about it?


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The news in tweets: Friday, July 7, 2023

Is this Keir Starmer’s fastest u-turn yet?

Starmer’s relaxed attitude to keeping promises has been exposed so many times that even mainstream news shows are catching on:

Tory claim about consistent investment in the NHS is a myth

Is Tony Blair’s idea for people to ‘queue jump’ NHS waiting lists by going private merely giving rich people faster access to public services?

Is that a good point?

I think it is – as those providing private health services are very often also working for the NHS.

Getting people to pay for their services encourages them to spend more time on their private practices than on NHS work, thereby disadvantaging the poor. Right?

The UK is NOT ‘running out of money’, no matter what is said on Sky News

Malcolm Reavell is more or less right. The UK government does borrow money from the Bank of England, but as the Bank is wholly owned by the UK government, it is literally borrowing from itself.

This act, in fact, creates money – meaning the UK cannot run out of it. The trouble is that the act of putting more money into the economy is inflationary (or can be). The answer to that, of course, is to set taxation at a level that negates the inflation caused by pumping in the money.

The logical way to balance this taxation would be by weighting it strongly towards the richest people in society; they benefit the most from the UK economy as it currently works. Also, for the economy to work at all, more of the money being pumped in needs to go into the hands of the people with the least, who will have to spend it on goods and services, simply to make ends meet.

That money then travels further – thereby adding more value to the economy – than if it was given to the rich in the first place.

Here’s why teachers are right to demand more pay – and why the ‘inflation’ argument against them is wrong

How would Labour stop profiteering banks? By having a quiet word with them. Will that work?


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Thornberry squirms when asked if Bank of England’s anti-inflation ideas are any good

Emily Thornberry: in this image, she’s making a gesture that, no doubt, she would like to make to whoever asked her to defend the Bank of England, its governor, and its interest rate rise.

Don’t have any sympathy for Emily Thornberry while you watch the clip below; she knows the situation very well and she could always quit if she had the required principles.

She knows that raising interest rates won’t bring inflation down – in fact, it is likely to prop inflation up instead.

She knows raising interest rates won’t ease the bureaucratic costs caused by Brexit, or stop profiteering by energy companies or firms in food supply chains.

And she knows that all businesses will just add the extra costs of higher interest rates into their bills, making consumers – you and me – foot the bill.

Some of them will go bust as a result, because people will decide not to pay their inflated prices, and this is likely to tip the UK into recession.

That, of course, is the last thing the UK needs right now.

All of this is known by Emily Thornberry, but she also knows that Labour policy is to agree that the neoliberal Tories and the neoliberal Bank of England are doing the right thing, even though she also knows that they really aren’t.

So we get to see performances like this:

Cracks are starting to show in the Labour Party’s right-wing facade.


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Up goes the interest rate – down goes the economy

The Bank of England: its interest rate rise will not reduce inflation but increase it.

The Bank of England has raised the UK’s base rate of interest on money lent by financial organisations to five per cent, in line with expectations after the government failed to bring down inflation.

The inflation rate remained at 8.7 per cent in May, due to Brexit, profiteering by firms including energy companies and businesses in food supply chains, and… interest rate rises that have pushed up the cost of money.

The higher interest rate is intended to give mortgage-holders less to spend – but in fact it means we all have less because businesses now factor interest rate rises into the prices they charge us.

It means that, in order to stop prices from rising, the Bank of England has pushed prices even further up.

The very rich will be able to cope with it, of course; they have more money in the first place. And they must have become rich somehow, meaning they’ll be able to make more money anyway.

(They’re probably the people who’ve factored the interest rate rise into their prices and will therefore take more money from us, especially if they have a share in energy firms, water companies or mortgage lenders).

Smaller businesses will go to the wall, of course. They aren’t selling items that are absolutely essential and in a country where wages have been artificially restricted to 2005 (or even turn-of-the-century) levels, people will cut non-essentials out of their spending.

The result: recession. And it’s a recession that could have been avoided if we didn’t have a gang of lunatic idiots running the nation’s finances.


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Labour voting-intentions data can’t help harvesters because it’s probably changed now

Oh dear. It seems a Labour Party system for storing people’s voting intentions may have been compromised by people who may want to use it for mischief.

I write “may” for a good reason.

Here’s the story:

The voting intentions of millions of Britons in local authority wards across the country could have been at risk of misuse as a result of a glitch in the Labour party’s main phone-banking system, the Guardian understands.

Experts had warned that the sensitive data could potentially have been harvested via an automated program and used for targeted election interference by campaign groups or even hostile states.

More than half a million Labour party members have access to the Dialogue system, used by activists to make calls to the public for a variety of reasons, including to ascertain how they are planning to vote.

However, within just a few clicks, the glitch meant that they could also access sensitive information including postcodes, which – when combined with voting intentions – would potentially have allowed them to generate a list of millions of people across Britain.

I wonder how much use it will be.

Depending on when the information was received, and bearing in mind the way the current Labour leadership has behaved, it is entirely possible that a lot of people who said they’d vote Labour have changed their minds.

Similarly, people who said they’d vote for the Tories may also have changed their minds and opted for Keir Starmer’s slightly-less-right-wing party.

And I remember from my time on Labour’s phone banks that a few people said they’d vote one way, and then didn’t.

In fact, I don’t think any of that information can be trusted. Could it ever?

Source: Labour glitch put voting intentions data of millions at risk | Labour | The Guardian


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Gordon Brown is yesterday’s man – but he still has good points to make about the Budget

Gordon Brown: his heart is in the right place but his ideas are rooted in an ideology that doesn’t work.

Does anybody care that, according to Jeremy Hunt’s own projections, by 2026 his government will have made us all much worse-off than we were in 2019?

Gordon Brown does – apparently. But the reaction he received from some people when he wrote about it in The Guardian suggests that they think he’s responsible.

Maybe it’s true that his New Labour governments didn’t make the changes that were necessary after 18 years of Thatcher and Major-style neoliberalism, and paved the way for a further 15 years in which the Tories have been able to destroy what was left of the way of life that had made the United Kingdom worth inhabiting.

But that doesn’t mean he doesn’t have anything worthwhile to say.

His factual points are all worth taking in because they contribute to a State of the Nation-style snapshot of what the UK is today. And it is horrifying:

271,000 homeless people

400,000 children who sleep without a bed of their own

14 million condemned to damp or substandard housing

7.5m UK households in fuel poverty

Food prices in the shops have risen 18% in a year, with many basic items shooting up by twice as much – baked beans up 35%, ketchup up 39%, tomato soup up 73%

9.7 million adults already skipping or cutting back on meals

Six in 10 adults unable to afford other basic essentials

A record 2.1 million people are using food banks

There are 14.4 million living in poverty, including 4.2 million children, the vast majority of whom are in families where the breadwinner is on low pay

As Brown put it at the top of his piece,

Poverty will last until doomsday if this Conservative government is all that confronts it.

The so-called “budget for growth” [is] more accurately titled the “budget for growth in poverty”

The point of his piece was that cleanliness is the next thing the Tories have rationed, with hygiene poverty leading to the rise of so-called “beauty banks” to run alongside the already-infamous food banks.

He was calling on retailers and manufacturing companies to offer up surplus goods and to consider special production-line runs of unbranded toiletries to ease the crisis.

But this is just – as current Labour leader Keir Starmer would put it – “sticking-plaster politics”. It’s putting a plaster over the wound but not healing it.

Businesses can certainly do much more to ease the crisis that the Conservatives have deliberately created to distract the young and the poor from their strategy to divert public funds into the hands of the old and the rich.

They can provide better pay and conditions, and opportunities for career growth that make it worthwhile. These tactics will reap huge rewards for them as, freed from the stress of poor health due to bad nutrition and harmful work practices, and unburdened by the mental ill-health caused by continually having to find ways to make ends meet, employees’ productivity will soar.

That is the best way out of the hole Hunt has dug for us. Indeed, it is the only way, as his government is absolutely determined not to help.

Source: Jeremy Hunt has left the UK to rot in poverty. So we must take matters into our own hands | Gordon Brown | The Guardian


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