Iron Bru › Forums › Non Football › Inept Government › Reply To: Inept Government
The markets have completely over reacted and the IMF should be ignored. Kwarteng had no choice but to step in over energy costs, generated it must be said by absurd net-zero targets and made worse by Putin. This cut inflation at a stroke, which reinforces what many people are ignoring, i.e. that inflation is not being driven by an overheated economy but by soaring energy costs. Of course inflation is still too high, but again that isn’t down to an overheating economy. The main culprit is still the cost of energy, which means the cost of everything else is going up while supply-side problems have been exacerbated by the world recovering from the pandemic.
Kwarteng needs to hold his nerve. The BoE can step in if and when necessary, which will almost certainly mean further increases in interest rates but even when this happens interest rates won’t be high. As for those with mortgages, welcome to the real world and savers will benefit, which they haven’t for many years. Regarding tax, removing the higher rate isn’t a problem fiscally and the left’s just using it for political purposes. The idea this could be used “to pay for nurses” is absurd when you consider that the public sector pension liability is now as big as, if not greater than government debt at around £2.5 to £3 TRILLION. Just a fraction of this would address poverty and the NHS overnight but, strangely enough, it’s never raised by the left.
Ultimately, the poor state of the economy will continue until energy costs are made affordable. The elephant in the room is that the drive to net-zero has been attempted far too quickly across the Western World. Everything that’s happened could have been avoided had Boris not chased a stupid net-zero target and the likes of Germany hadn’t relied on Putin. Biden is taking the USA in the same direction while Australia’s turning into a basket case going along similar lines.
Let’s be 100% clear about this, poverty is now being driven primarily by ridiculous net-zero targets. Don’t say you weren’t warned.