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They don’t learn from Canute, do they?

Downing Street has ordered banks to protect struggling homeowners from soaring mortgage costs

Tides and prices don’t obey orders rather than do.

15 thoughts on “They don’t learn from Canute, do they?”

  1. Downing Street creates conditions which force the Bank of England to raise interest rates, leading to soaring mortgage costs.
    Downing Street then dictates that banks cannot pass on the increase in base rates to their mortgage holders.
    Sounds like the days of Treason May, capping what the energy suppliers could charge their customers while wholesale prices were going up, leading to the collapse of 28 energy suppliers.

    They ARE mad aren’t they?

  2. What’s the point of having an able chap like Rishi as PM if he’s going to do the same bloody stupid things that a thicko like Corbyn would do?

    Next he’ll issue orders for the winds to blow harder.

  3. The Meissen Bison

    It came as Andrew Bailey, the Governor of the Bank of England, said he was poised to launch a review into why the central bank has been so wrongfooted by inflation. He admitted that price rises were “taking a lot longer than we expected” to return to the Bank’s 2pc target.

    How nice. The BoE marking its own homework!

    The review will conclude that it was the Treasury’s fault, that lessons have been learned and will studiously ignore excessive and extended money printing.

  4. I’d still like to know why the BoE has a 2% target. WTF’s it got to do with the BoE. Inflation is a market price signal. BoE targets are what has got the economy in the shit it is today.

  5. If they do what banks in Canada – at the orders of the non-financial Finance Minister – have done with mortgages (according to this excellent blog: ) they’ll start on variable rates by extending the amortisation period. Some in Canada are now on 50, 60, 70 or even 80 year amortisation periods (though in fairness they do do things very slightly differently over there, but the effect is the same). Banks make loadsamoney over the longer term, borrowers are crucified with massive increases in total interest payable. But it’s inconceivable that a politician would do anything other, these days, than try to buy votes by being seen to “do something”.

  6. Bloke In Scotland

    Isn’t the whole point of high interest rates to divert money away from spending? Sounds like banks passing the rises on is exactly what the policy intended to do.

    I’d take the Downing Street plea as just playing to the press. But then gas price caps and the quality of the average mp comes to mind. They really are morons.

  7. Bloke in North Dorset

    Weren’t the civil service and possibly the HoL supposed to provide politicians with institutional memory? Doesn’t anyone remember these policies being tries in the ‘70s by both parties and the e Ono if consequences?

  8. The Meissen Bison

    BiS: I’d still like to know why the BoE has a 2% target. WTF’s it got to do with the BoE. Inflation is a market price signal. BoE targets are what has got the economy in the shit it is today.

    The supposedly “independent” BoE is supposedly in charge of monetary policy which is why the inflation target rests with them.

    The Truss/Kwarteng defenestration demonstrates that the BoE is as politically partisan as the Treasury (and the civil service more broadly) and is able merrily to ignore the targets that are set for it.

    If the tone of your comment suggests that you think it’s all arbitrary and dysfunctional then I entirely agree with you.

  9. @BiS

    It’s how politicians drive: they push and pull on the speedo lever to set the speed.
    So they also push and pull on the money-supply indicator to set the money supply.

    We really need a “Stop voting for the f*ckwits party”

  10. Cheaper option would be to find the ONS’s basket-of-goods list, and subsidise everything in that. Inflation falls, bank lowers rates again, everyone happy.

  11. Andrew M, Is the indexation formula for indexed-gilts still based on an ONS basket-of-goods index? Would there need to be separate subsidised and non-subsidised indexes to avoid an expensive legal case from gilt-holding institutions?

  12. Everythings’ on basket of goods. It’s the other bits – RPI, CPI, CPIH – are differences in the way housing are treated.

    From memory index gilts are RPI and boy, do they want to change that.

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