THE Bank of England’s crisis came out in the open at yesterday’s meeting as the Bank’s governor Andrew Bailey was opposed by two of his main allies during the latest interest rate crisis decision.
The BofE governor, during the meeting, voted to cut the bank’s interest rates from 4.25% to 4%.
A feature of the vote was that his deputy, Clare Lombardelli, and his chief economist, Huw Pill, voted against the cuts, pointing to growing fears over the growth of inflation. In fact the nine-person panel of policy makers were so split that they were forced into a second vote to try to break the deadlock.
For the first time since the Bank gained independence in 1997, the Monetary Policy Committee decided to cut borrowing costs to levels not seen since March 2023. In fact, a second vote was required after the rate-setter Alan Taylor agreed a cut of 0.25%, down from his earlier preference of 0.5% cut.
The BoE split reflects the precarious position of the UK economy. The Bank’s most senior economists were split on how to ‘kickstart growth’.
Matthew Swanell, chief economic advisor to the EY Item Club, commented the votes ‘masked an uncommon level of dissent amongst the committee’.
The vote comes after the UK economy shrank first of all in April and then in May, first by 0.3%, and then by a further 0.1%, with unemployment rising to a four year high of 4.7%. However, the BoE decision to cut interest rates will bring no relief to British workers struggling with rising taxes and insurging food bills.
The crisis of British capitalism is so severe that growing sections of the working class, many of whom have never taken strike action before, are rising up as their jobs, wages and basic rights come under attack from the Starmer-led Labour government.
Labour PM Starmer and chancellor Reeves are only concerned with solving the problems of British capitalism, that is in its death agony. Their way out of the crisis is to maintain capitalism by holding down wages, slashing benefits and destroying all the gains of the welfare state.
This government is a crisis government with a growing number of its MPs resigning over its anti-working class measures. Yesterday, the Labour Minister for Homelessness, Rushanara Ali was forced to resign over claims that she had evicted tenants after increasing the rents of property she owned.
In fact, Labour’s large majority in parliament is dwindling in the face of the growing anger of the working class at the constant attacks on its living standards.
The Labour Party is expected to split in the autumn with a number of Labour MPs joining Jeremy Corbyn’s new party when it is established.
The TUC, which is meant to represent the working class, meanwhile stands paralysed with fear and hoping against hope that ‘something will turn up’, when obviously the situation for the working class gets worse every day, with a ruling class admitting that the economic situation is appalling and the capitalist crisis is deepening.
Millions of workers are now being forced to take action to challenge the government to defend their jobs, wages and basic rights. This includes doctors, nurses, Birmingham bin workers and many others now driven into struggle against this government.
The TUC Congress meets on September 7th in Brighton and has important issues before it. It cannot remain silent any longer. It must be forced to call a general strike at this TUC Congress to bring down this bosses-led Starmer regime and bring in a workers government.
If it continues to allow workers to fight alone in their industries and ignores the great strength of a united working class, the leaders of the TUC must be kicked out and replaced by leaders who are not afraid to bring down this Labour government and establish a workers government with a socialist planned economy.
It must also take the lead to support the struggle of our brothers and sisters in Palestine in bringing down this Starmer government that supports Israel; the TUC must not only recognise a Palestinian state, but actually assist in defeating occupying Israeli forces and bringing in the state of Palestine.
This is the only way to do away with backward crisis-ridden capitalism, establish peace in the Middle East and allow mankind to advance forward to socialism.
