Monday 17 January 2011
E&Y lay into the Conservatives
This is an odd argument, as Prime Minister Mr. Cameron should be able to comment how he likes, and the Bank of England are free, due to their Independence, to ignore him if they so wish. The concept of Free Speech here, so long put down under Labour, is clearly troubling for some people. Perhaps the underlying point, that Cameron can see inflation as a problem which the mainstream economists keep denying, is the more important factor.
Building on this comment, Mr Spencer then has harsh words re potential interest rates rises, arguing that with already fiscally conservative VAT hikes, interest rates rises are the last thing we need. Of course, he does not make the point that perhaps not increasing VAT and raising interest rates is the thing to do.
Also ignored by everyone at the moment is what are we going to do with £200 billion of QE bought Gilts? Surely these have to be bought back (or monetised...) before we can contemplate interest rate rises. It is this latter point that personally holds me back from moving to a fixed rate mortgage. Why is this being ignored?