Someone help me out here. The main people hurt by inflation are the poor since they have the least capacity to absorb increases in prices – and yet the job of controlling inflation is handed to an organization whose only weapon is raising interest rates, something which again disproportionately hurts the poor.
Why do we do it this way ?
The Bank of England is asked to make sure a water pipe after a T junction has an exact flow at all times but they have no control over the amount of water coming down the pipe one way and only a flywheel attached to the pipe coming in the other way. It isn’t even completely clear that the flywheel they do have does anything. Indeed it may only work because enough people think it does.
Clinging to the idea that we have any control over inflation in a global economy is completely bonkers.
Why do I feel like the brunt of this ‘force’ will be faced by the poor and working class, likely through pay restriction and cuts.
I might be wrong but my understanding is the only forceful thing they can do is deliberately trigger a recession?
By forcefully they mean they will wake up andrew.
They gonna get rid of Boris and put us back in the EU?
Option 1. Don’t raise interest rates. £ stays weak. Cost of living crisis still there since most commodities are priced in $ but bought with £. Economy tanks.
Option 2. Raise interest rates. Mortgages increases. Cost of living crisis still there. Economy tanks.
Option 1 affects poor people more. Option 2 affects homeowners more.
BoE is currently choosing option 1.
Essentially the poor are fucked and the economy is going to tank
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Someone help me out here. The main people hurt by inflation are the poor since they have the least capacity to absorb increases in prices – and yet the job of controlling inflation is handed to an organization whose only weapon is raising interest rates, something which again disproportionately hurts the poor.
Why do we do it this way ?
The Bank of England is asked to make sure a water pipe after a T junction has an exact flow at all times but they have no control over the amount of water coming down the pipe one way and only a flywheel attached to the pipe coming in the other way. It isn’t even completely clear that the flywheel they do have does anything. Indeed it may only work because enough people think it does.
Clinging to the idea that we have any control over inflation in a global economy is completely bonkers.
[A job well done.](https://www.economicshelp.org/wp-content/uploads/2017/10/inflation-interest-rates.jpg.webp)
Why do I feel like the brunt of this ‘force’ will be faced by the poor and working class, likely through pay restriction and cuts.
I might be wrong but my understanding is the only forceful thing they can do is deliberately trigger a recession?
By forcefully they mean they will wake up andrew.
They gonna get rid of Boris and put us back in the EU?
Option 1. Don’t raise interest rates. £ stays weak. Cost of living crisis still there since most commodities are priced in $ but bought with £. Economy tanks.
Option 2. Raise interest rates. Mortgages increases. Cost of living crisis still there. Economy tanks.
Option 1 affects poor people more. Option 2 affects homeowners more.
BoE is currently choosing option 1.
Essentially the poor are fucked and the economy is going to tank
Have they tried turning off the money printers?