For some reason, the bank of England has deemed it necessary to issue an apology to the British public. I would not hold them responsible for a global pandemic that has had a detrimental effect on our economy; it should really be the Chinese government apologising. However, as dictators rarely feel compelled to offer apologies, I suppose someone has got to do it for them, why it is the bank of England, though, remains unannounced.
Forecasts suggest inflation (cost of living) could reach 5% in the early part of next year, the highest level in a decade. This is hardly a shock, having the entire economy closed down with nobody buying anything was unlikely to be an economical goldilocks zone. Why do we care? It will mean goods cost more, which is particularly bad for those on benefits, fixed incomes and pensioners (16% of pensioners are considered to be in poverty, which may leave them with difficult choices between warmth and food and other essential goods.) This is worrying, as these pensioners will then be particularly vulnerable to diseases, which is even more worrying when there is currently a five million long treatment waiting list in the NHS.
The bank of England is delaying raising interest rates, apparently awaiting to see the economic effects of coming off the furlough scheme first. With the economy currently dragging its heels, it is a bad time to increase interest rates. The economy needs the disposable income that leaves people with mortgages, and the government needs rates to stay low so it can continue its levelling up schemes. Despite generally having distain for the “economically illiterate” Johnson, keeping rates low does appear beneficial in allowing individuals to continue investing in the business’ still scrambling to make up for lost profits.
Nobodies saying inflation rising is a good thing. It will leave economically vulnerable people with even less money in their pockets, and the possible health impacts will not help an already overburdened health service. Still, apology seems unnecessary. Hard economic times were coming, and the governor has the unfortunate position of having to decide which demographic he is going to hurt, it is better he makes the choice most beneficial for the overall economy.
It is even possible that the forecasts predict rainier days than actually lie ahead, and the current rising inflation can be attributed to supply shocks. For example, in Los Angeles has seen clogs in the ports, where container shortages of up to $6,000 have caused rising costs in containers. Therefore, the bank of England is apologising for not jumping over hypotheticals, a fact that actually seems reassuring. Regardless of whether inflation rises or not, it is the duty of the bank to deal with the issues as effectively as possible, not make apologies. Nobody cares if you are sorry, just get on with your job and help ease the nation out of the mess it is currently in.
Sorry is unlikely to stop the economic pain people will feel from rising inflation. Sorry, however, from the real cause of the issue might make some of us feel a little better about being locked in our houses for a year. In case it is not clear, I have a bone to pick with a certain President Xi, not with Mr Bailey (Governor of the bank), whom can find himself not guilty of causing a global pandemic.
Written by Adam Caudle