THE Bank of England yesterday held UK interest rates at 4.75% until at least next February.
This follows two cuts to the interest rates this year, on the back of falls in inflation, which the Bank proclaimed was a sure sign that inflation had been defeated and that a return to the days of cheap borrowing was imminent.
This was when interest on debt was at near zero levels and companies could gorge themselves on ‘free money’, while naturally pushing any costs onto consumers in the form of higher prices.
This continual flow of cheap debt inevitably helped fuel a massive increase in inflation that the Bank sought to tame by pushing up interest rates and driving up the cost-of-living.
Inflation fell from its peak of 11.2% in 2022 down to 1.7% in September this year.
However, far from disappearing inflation has been steadily rising in the UK forcing the Bank to end rate-cutting programmes and prepare for inflation and the cost of living to soar once again.
One of the main drivers of inflation, according to the Bank, is increases in workers’ wages. According to the Office for National Statistics, pay packets are now growing at 5.2%, up from 4.9% three months ago.
The fact is that any increase in wages does not begin to compensate for the massive increases in the cost of living workers have endured since the Tories waged their austerity war on the working class in 2010.
The rises in the cost of living are considered irrelevant by the Bank and the capitalist class as a whole.
The reality for workers is that even when inflation was apparently coming down, prices for essentials like energy, water, and food remained at sky-high levels.
The working class has had enough of being made to sacrifice their lives for the profit of the bosses and bankers. In fact, the last years of the dying Tory government were years of mass strikes with millions demanding pay increases.
If the capitalist class hoped that a Labour government, led by Keir Starmer, would be able to do what the Tories failed to do, by convincing workers that they must accept ‘sacrifices’ for the good of the bosses and bankers – then they have been sorely disappointed.
Starmer is facing massive opposition to his demand that the working class and elderly suffer in order to drag British capitalism out of bankruptcy.
Starmer and his Chancellor Rachel Reeves have torn up all the pre-election promises on child benefit, and winter fuel payments to pensioners. The latest pledge to be ripped up is the denying of any compensation to tens of thousands of women born in the 1950s, whose lives have been devastated by the Tories sneaking through legislation pushing up the retirement age at which they are entitled to state pension.
While Labour is actively heaping misery on the working class and pensioners, it is happy to allow the privatised companies to leech billions in profits from workers and the middle class.
This was graphically illustrated this week when the water industry regulator Ofwat fined Thames Water, which supplies water to 16 million customers, over £18 million for making unauthorised pay-outs to shareholders of £37.5 million.
Just hours later Ofwat announced that Thames would be allowed to increase its charges by 35%, on top of all of the other increase permitted to off-set inflation.
This increase will more than pay off the fine for handing out millions to investors.
Through Ofwat, the Labour government has allowed the most basic essentials for life – water, heating, and energy – to be priced out of the reach of tens of millions of workers and their families, while the shareholders and investment companies loot billions.
The working class will never allow itself to be driven into the ground by this Labour government.
The TUC has refused to lift a finger in opposition to all these attacks, and the urgent task today is to force a recall of the TUC congress to remove the leaders who are complicit in Starmer’s war on behalf of the bosses, and replace them with a new and revolutionary leadership.
What is required is a revolutionary leadership prepared to organise the strength of the working class in a general strike to bring down the Labour government, replacing it with a workers government and socialism.
Join the WRP and Young Socialists to build up the revolutionary leadership required for the victory of the British socialist revolution!
