Err, Polly?

Inflation springs from rising import prices, due to the plunge in sterling caused by Brexit – not from rising wages, which are stuck at little over 2%. Raising rates will hardly affect foreign prices – sterling may plunge again if the Brexit deal looks bad.

Raising interest rates does raise the value of the £, all other things considered.

We’ve told you before not to get your economics from Richard Murphy.

Just about everything done in the past seven years of taxing and spending has dug a deeper hole in the national finances and in most people’s pockets – apart from the soaring number of super-rich, beneficiaries of quantitative easing that sent mostly untaxed wealth and property sky-high.

Raising interest rates will aid in reducing those asset prices pushed up by QE.

Raise the top rate of income tax: latest research quoted by tax specialist Richard Murphy shows a top rate of 60% would aid growth.

Told you the source of this.

18 thoughts on “Err, Polly?”

  1. Murphy is jester to the Court of Fouls that is the left.

    Of course that wicked and deceitful hag Pol is going to quote a creature who tells her what she wants to hear.

    That does not excuse the last 7 years of BluLabour antics anymore than it excludes all the socialist bungling since WW2.

    To Hell with all of them. But good luck trying to rationally explain to the state indoctrinated and illducated masses how the Tories are about –what?–5? –per cent less full of socialist shite than ZaNu.

  2. — “sterling may plunge again if the Brexit deal looks bad.”

    In which case the no-deal option looks even more desirable.

  3. The right see problems and try to work out solutions to them.

    The left have the solutions pre-planned and apply them both to problems and to things that are working well.

  4. ‘Expect repossession of mortgage homes.’ Given the flat state of the housing market, I’d have thought this was furthest from lenders’ mind – that they’d go the extra mile to keep people in their homes. Polly recycles the standard litany of pessimistic soundbites, demanding (surprise, surprise) more taxes on anyone earning in excess of the median income (£27k?). I’m sure it’s an election winner.

  5. She’s wrong in principle, but she might be right in practice. By how much can we expect £ to rise for each 0.25% interest rate increase? Not a lot, I imagine; and not at all if other central banks start tightening too.

  6. I seem to remember when the rate went up under Brown it raised pretty much nothing. Brown knew this, of course, it was a landmine for the incoming government

  7. Polly’s tuberous reference is probably only a bit of foreplay engineered (and I use the word advisedly) in all likelihood by Rocco in anticipation of the main feature he promised us the other day.

  8. allthegoodnamesaretaken

    I am still mystified as to why these loony lefties who want everyone to pay more tax don’t lead from the front…. then try to deny claims of hypocrisy when it’s pointed out to them.

  9. When Polly suggested raising the top rate of income tax, the Richardian todger expanded massively and took on a purple hue

  10. What a hoot!

    In what I think he imagines to be homage to Martin Luther, the perpetually trite Murphy puts up 45 theses on his blog today, mostly on tax and economics but also, ludicrously, on the second law of thermodynamics.

    What he actually achieves is proving what a worthy successor he is to Florence Foster Jenkins

  11. It’s a relief to know that Snippa thinks that the second law of thermodynamics holds true. I was starting to waver. But what about thesis 20, markets tend towards monopoly? Or thesis 7, government debt is the major part of the money supply? This reads like a plea for help from a mind that has blown up

  12. In what I think he imagines to be homage to Martin Luther, the perpetually trite Murphy puts up 45 theses on his blog today

    TW will be busy.

  13. If someone points out to you that your pet theory of the universe is in disagreement with Maxwell’s equations — then so much the worse for Maxwell’s equations. If it is found to be contradicted by observation — well, these experimentalists do bungle things sometimes. But if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation.
    Sir Arthur Stanley Eddington, The Nature of the Physical World (1915), chapter 4

  14. @Paul, October 31, 2017 at 9:54 am

    I seem to remember when the rate went up under Brown it raised pretty much nothing. Brown knew this, of course, it was a landmine for the incoming government

    Brown ordered his puppet chancellor Darling to increase rate from 40% to 50%. It brought in less than nothing – less revenue received by HMRC

    It was a landmine and virtue politics.

  15. Along with tapering of personal allowance to zero for those earning > £100k.
    Mind you Osborne also a massive &@?£ – reducing lifetime allowance on pension funds and also tapering of allowable contributions.
    All together pretty eye watering.

  16. Update on my comment a few days ago:

    Sterling fell pretty sharply right after the interest rate announcement. So no, the link between interest rates and exchange rates isn’t as linear as you might think. Too many other factors in play.

  17. Other factors as well, sure – but the theory of any relationship like that is always based on expectation, rather than the actual? Eg, profits are up but the share price falls – because the market had already priced in a higher profit expectation, etc. The underlying relationship still holds.

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