Blame the Bank of England, blame the Chancellor – they brought on this mortgage pain

Honestly, I feel like a cracked record

I keep on saying on radio, on TV and in print, that we should not raise interest rates .  

I’ve been saying it for months now because I’ve known that, although in the past raising interest rates would bring inflation down, nowadays it doesn’t work., because there are different reasons for inflation now  

Of course, the biggest reason for our current inflation has been quantitative easing – money-printing – which our hapless governor of the Bank of England. Andrew Bailey, insisted was not the reason for inflation. Yes it is – printing money directly causes inflation.

We also have the wicked and unnecessary war in Ukraine which we are sending £billions to, which has made the price of our utilities shoot up, together with the lasting effects of evil lockdowns breaking supply chains and making everything slower…even now.

inflation is not being caused by consumers having too much money. Having too much money is not a problem we are facing right now, so making it more expensive to borrow more money will not help things. It will only cause pain. It will not improve our economy.

Raising interest rates will increase people’s cost of living, particularly if they have a mortgage or other loan. It will also materially affect our economy, in a negative way, and cause bigger problems down the line.

Led by donkeys

Andrew Bailey is clearly not cut out to be governor of the Bank of England and needs to be removed  immediately

I feel the same about the unpopular Jeremy Hunt, Chancellor of the Exchequer, who was brought in by our unelected Prime Minister. He has said that he’s happy to raise interest rates even if it pushes us into recession.

Wicked!

We do not want a recession. It’s better to have high inflation than a recession that would tank our economy. 

Interest rates take months to kick in

The current mortgage pain that many homeowners are going through, and will continue to go through in the next few years is something that I have been predicting for over a year now . I said that raising interest rates was wrong.  . I also said that we should not have been printing, the insane amounts of money that we were doing over the stupid lockdown period. I said, and continue to say, that lockdown was wrong and should not have happened. if we hadn’t had lockdown, we wouldn’t have needed extra cash. But even with lockdown we still printed too much cash for that.

It takes at least 9 months – more like a year or so – for interest rate changes to take effect. That’s where we are now as interest rates have been rising for several months now. We’re at the point, too, where people’s fixed mortgages are coming to an end and their average rate of 2.75% or so (as it was in February) will jump to well over 5%. So many homeowners will see their mortgage payments double…at least.

We also have the problem that many businesses need to borrow money and those that can’t because of the expense, will fold. i am already hearing of some property development companies crashing. This will affect employment and that’s a downward spiral (thank you Jeremy Hunt).

Who do we turn to?

So the issue that we have now is that we have a government and a central bank that have run out of ideas because of their appalling behaviour from the lockdown years .

In 2021 I was saying we should quickly raise interest rates to stave off inflation but that wasn’t done of course.

Now, by waiting so long, the BoE has basically lost the window of opportunity to do any good by raising rates and are just doing harm.

Remember, inflation is not a natural phenomenon. It is a disease of money that is created exclusively by governments. We the people will suffer the pain of this. We need to demand that rates are brought down and that inflation is handled by

• opening coal-fired energy production again
• encouraging farmers to produce food rather than trying to close them down
• encouraging productivity across the board by bringing taxes down.
• supporting small businesses – the lifeblood of our economy – rather than trying to tax them till they squeak, as Sunak seems to want to do.

Unless we do the above this is not going to end well.