. Richard Murphy for Tax Research UK advocates positive action by government . Points made in January are just as relevant today 30% of all government debt is owned by the Bank of England – which is government owned – so debt is not as high as the Tories claim and the need for debt […]
Practical proposals emailed to us by our founder member Colin Hines: *** NEWS RELEASE *** EMBARGO: 00.30am, Thursday 9 February 2012 INVENTOR OF QE AND GREEN MP CALL FOR UP TO £70BN GREEN QUANTITATIVE EASING TO STABILISE FLAGGING UK ECONOMY Economist Professor Richard Werner, who proposed the term “quantitative easing” in Japan in the 1990s, and […]
The Bank of England should now be recommending a savings rate of about 2 % and maybe a lending rate based on 4%. They should discard the fictional rate of 0.5 %. This would boost the £, and therefore bear down on inflation. But it would also safeguard domestic purchasing power and do a much needed something for confidence.
Interest rates paid by UK households are however, already some of the highest in Europe. Despite all the talk of record lows you will hear from the mainstream media. Given how our economy has evolved, any monetary policy other than safeguarding domestic living standards makes less sense than ever before.
The highest rate of inflation among the original G7 members, is our UK inflation rate. Although there is much doubt about how representative the official figure is, no one really believes the official figure under estimates inflation. Over a decade after inflation and interest rate management was taken out of the hands of politicians this is an unexpected predicament. The whole logic of the hope of the 1990s was that the UK would have a sounder monetary system if politicians and their short-term agendas were taken out of this level of economic management. That was supposedly the lesson of experience overseas.
Rather than inflation in the UK being the result of a series of one-off occurances as Mervyn King insists, perhaps we are heading for a new world-wide era of Austerity. With inflation rather than deflation being the main global issue. What we have been promoting as our Regional Prosperity and Inflation Framework, might well have to serve as an ‘Austerity & Inflation’ Framework.
It looks like a trend has now firmly set in for us to be the inflationary economy which besides undermining our living standards will help overseas companies hold their grip on our home markets.
None of our current inflation indices register the unique house price inflation the UK has had. Had they done so in any manner comparable to Germany and the US, there would have been far higher inflation registered across the UK under New Labour. Looking at housing affordability indices gives us some idea of the seriousness of the real inflation being missed. And an index that shows this up region by region would show a revealing story for the West Midlands. We show what it would reveal.
The new government have inherited the highest inflation rate in the G7. And as they consider any sort of increase in VAT to pay off national debt they need to think about how they keep their finger on the national pulse as the country faces these challenges to their living standards. More like Ronald Reagan than Margaret Thatcher.
The Liberal-Conservative coalition agreement involves the setting up of a cabinet committee on Banking which will be chaired by George Osborne; and this committee will set up an independent commission to look into whether the banks need breaking up and how to do it. As the banks collapsed in 2008, I was doing some research […]