This is amusing:
And they do not need to do so, because the reality is that this inflation is being imported. Russian wheat shortages, imported gas and oil (and we are now a net importer), imported food and increases in the price of raw materials are what are causing this inflation, in addition to the impact of VAT rises. The VAT increase apart none of these will be resolved by any action the Bank of England or the government can take – unless they are willing to regulate speculation in raw material and food prices by hedge funds and others which are no doubt fuelling this crisis. So any action to reduce demand can only make this crisis worse for the working people of this country.
He\’s forgotten about exchange rates. Other things being equal, a rise in interest rates should raise the value of the currency. Thus higher interest rates would reduce imported inflation as sterling rose against other currencies.
But what\’s really amusing is that Ritchie is arguing for continued inflation: not an absurd idea by any means. But rather strange from someone who insists we should all be saving for our pensions in Green Bonds paying 3% interest: when inflation is 3.7%.