Gordon Is To Blame
While he desperately scrabbles around attempting to draw our attention elsewhere, a few home truths seem to be dawning on the general public about the true state of the british economy. The fact that a 0.25% rise in interest rates comes as a shock to people while inflation is way over it’s 2.0% target at 2.7% (and likely to climb even higher when figures are released on Tuesday), gives some picture of how foggy the general public conciousness continues to be on the subject of the economy.
This news, however, appears to be making at least some sit up and take notice, not least the Daily Telegraph, where we are reminded that any oncoming hardship is most likely to be all Gordon’s fault:
With typical dishonesty, Gordon Brown’s apologists were quick to say that he would support the Bank of England’s aggressive (and, in my view, entirely correct) monetary policy in the interests of sound money. But this is a man whose borrowing addiction and spendaholic cravings are causing the broad supply of money in this country to rise by a whopping 14 per cent a year, way ahead of the combined rate of inflation plus growth. If Mr Brown were as clever as he thinks he is, he would remember the true definition of inflation as too much money chasing too few goods. That is exactly what we have now, and it is his fault.
He has been doing exactly what the disastrous Tory chancellor Tony Barber did during the oil price boom of 1973. He has pumped money into the economy, trying by interventionist means to keep everything buoyant: in effect, trying to rig the markets. Therefore, we have inflation rising towards a level that is dangerous for our economic equilibrium. In fact, it has probably already gone well past that point.
There is a threat of further interest rate rises next month. Whenever they come, there will certainly be more. Thursday’s rises will already add to a growing trend of house repossessions. Subsequent increases may cause an avalanche. The effects of Mr Brown’s mismanagement could be ghastly over the next few months. It won’t just be that some people will no longer be able to afford to pay their mortgages. Property prices will fall, in some areas quite precipitately. Retailing, which claims already to be feeling the pinch, will have a torrid time. Our exporters, such as they are, will suffer from their goods becoming dearer in overseas markets, as high interest rates drive up the value of sterling against other currencies. People will lose their jobs. The take from taxes will be squeezed. In order for Mr Brown to maintain his programme of social engineering, he will have to tax those in work even more, and find new ways of stealthily taxing all of us.
