Recent problems with Silicon Valley Bank and Credit Suisse are examples of the stress that interest rate rises are putting on the financial system. But relaxing monetary policy now risks entrenching inflation.
I cannot think of a time when market confidence was plummeting in both the Chancellor or the Governor of the Bank of England at the same time. If neither is up to the job, both should go.
The markets expect the Bank’s intervention to continue past Friday. Either Bailey or Kwarteng must deliver something big soon or the financial jitters will get worse.
The wise men of Trussonomics are more divided on this subject than one might think.
The Prime Minister and Chancellor will have been hoping for a higher rate rise today. Trussonomics requires a tighter monetary policy.
Businesses and employees are only responding to monetary conditions set by the Bank of England, where the real responsibility lies.
If the party really wants to honour its past, then it must face up to problems of the present.
The fundamental problem is that costs are going up faster than we are getting more productive.
If the Bank of England doesn’t catch up, four per cent or five per cent inflation for a couple of years could cause real problems.
Covid-19 is likely to have lasting effects on our preferences, where and how we want to work, and where we are able to travel.
Our exit from the EU should allow fresh thinking and a new regulatory approach – to allow the UK to reach its full economic potential.
Brexit doesn’t just allow the City to make its regulatory regime more competitive; it obliges it to do so.
One would suspect that the Government’s primary objective will be to stabilise and bed down the new relationship with Brussels.
The Chancellor is set to build a relief road to get round the present pile-up of Government, banks and business.
Nobody doubts he faces tough choices. But Bailey should focus on monetary stability, not political posturing.