from thefreeonline on 15 August, 2023 by Undercover1
Many mortgage payers – whether middle or working class – are facing financial ruin and/or loss of their home, thanks to Bank of England (BoE) punitive interest hikes.
The hikes are supposed to help bring down inflation. But some economists argue that these hikes are politically motivated and that inflation can be better curbed by very different means.
Another way
Howard Beckett of Unite the Union tweeted that the best way to curb inflation is by taxing the wealthy and by nationalising the energy companies:
Meanwhile, economist Carsten Jung pointed out how inflation in Spain is only 2%, which is considerably less that that of the UK. He explains why:
Spain capped energy prices by more than the UK, lowered the cost of public transport, taxed excess profits and put in place limits on how much landlords can raise rents.
Moreover:
While in Spain energy price caps are set to continue into next year, in the UK, the degree of support has already been lowered, covering fewer businesses than previously, and is set to end completely in autumn.
More energy price support plans for households and small businesses are needed, Jung further argued. He added that higher interest rates “means fewer jobs, higher mortgage costs and lower growth”.
Bank of England bias
Observer economics editor Phillip Inman meanwhile commented:
[BoE] Governor Andrew Bailey must have called for wage restraint 10 times for every one he has mentioned companies and their profits. It’s a bias that deflects from one of the main causes of inflation and should be corrected.
Tribune journalist Grace Blakeley agrees that it’s the big companies, not consumers, that are the main cause of rising inflation:
Class warfare
However, economic justice campaigner, Professor Richard Murphy goes much further.
He explained in a lengthy thread exactly why the interest rates hikes are the result of collusion by the the BoE, High Street banks and government.
Indeed, Murphy goes on to accuse the BoE of engaging in class warfare:
That accusation is much closer to the mark.
Greedflation
Inflation is the result of higher price rises by energy and food producers and retailers, not by consumers’ spending, argued Jung and Inman.
My article published in the Canary earlier this year quoted a report from Unite the Union. It showed that according to the FTSE 350:
profit margins for the first half of 2022 were 89% higher compared to the same period in 2019.
Unite added that Tesco, Sainsbury’s and Asda “made combined profits of £3.2 billion in 2021, nearly double pre-pandemic levels”.
Unite general secretary Sharon Graham commented:
We’re in the midst of a cost of profiteering crisis.
When the profits of Britain’s biggest firms have spiked 89%, don’t tell me the money isn’t there for the pay rises workers need and deserve.
In March 2023, the union published a detailed 155-page report on profiteering identifying many of the corporate culprits.
As well as food suppliers, the report examined profiteering by energy suppliers, adding that leaked Treasury forecasts show “UK gas producers and electricity generators could make “excess” profits of up to £170 billion over two years”.
Scam
As for the higher mortgage payments people having to pay, these go to the banks and building societies, which, as Murphy pointed out, are doing very well from the cost of living crisis.
In simple terms, what we are witnessing is a scam, driven by a rotten, class based financial system, that leaves many people malnourished, and dependent on charity.
It’s capitalism at its worst
Featured image via Jonny White – Flickr, resized to 770×403 pixels under licence CC BY 2.0
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