From what I understand, the reason for increasing interest rates is to try and reduce the general publics spending, and trying to reduce inflation essentially by reducing demand as people cut back.
I don’t see how that can apply this time, considering the big price increases seem to be food staples and energy.
I’m not an economist, so could be extremely wrong, but it just doesn’t make sense to me.
Higher rates, much higher, are what’s needed.
That will boost the pound and reduce inflation.
A reduction in house prices is then an added bonus, and closures of failing businesses is simply collateral damage.
2 comments
From what I understand, the reason for increasing interest rates is to try and reduce the general publics spending, and trying to reduce inflation essentially by reducing demand as people cut back.
I don’t see how that can apply this time, considering the big price increases seem to be food staples and energy.
I’m not an economist, so could be extremely wrong, but it just doesn’t make sense to me.
Higher rates, much higher, are what’s needed.
That will boost the pound and reduce inflation.
A reduction in house prices is then an added bonus, and closures of failing businesses is simply collateral damage.