Worse though, I do not like the pretence implicit in this relationship between the Treasury and the Bank of England. Monetary policy in the UK should be under democratic control. The suggestion that it was not was always deeply subversive, and profoundly neoliberal. It is time that this supposed power that is granted to an accountable group was brought firmly back under Parliamentary supervision.
Markets – that’s the people with the money – don’t trust politicians over interest rates and inflation. Shrug, just don’t. So, that independence of the Bank lowers the interest rate that must be paid on government debt. Shrug, just does.
So, why do we want to increase the cost of govt borrowing?