ANDREW Bailey, governor of the Bank of England, bluntly spelt out to MPs that the world faces an ‘apocalyptic’ food crisis that will have a devastating impact on the world’s poor and for the working class in Britain.
Bailey was appearing before the Treasury select committee on Monday to be grilled as to why the Bank of England hadn’t done anything to stop inflation from spiralling out of control in the UK, and what steps the Bank would take to bring it back down.
The public interrogation and humiliation of Bailey was clearly designed to dump the blame for inflation squarely on the back of the Bank in advance of the official figures released today which show that the annual inflation rate in the UK is climbing towards 10% and will go even higher when the energy cap is raised even more in October.
In response, Bailey threw his hands up and told the committee there was nothing the Bank could do to bring down inflation; it was all due to events totally beyond their control.
He told MPs that while he was ‘unhappy’ about the level of price rises it was all down to unpredictable events, the Covid pandemic, and now the imperialist war against Russia.
80% of the inflation increase was down to external events over which the Bank had no control, Bailey told the committee.
This would have drastic consequences for the working class and the people of the world as the world’s granary has been closed down while Russian oil and gas supplies to Europe have been completely disrupted.
Bailey admitted that a ‘very big income shock’ to households in the UK is fast approaching while some of the poorest countries in the world face starvation.
‘Sorry for being apocalyptic for a moment, but that’s a major concern’ Bailey said, before noting that global wheat prices have increased by nearly 25% in the last six weeks alone.
When asked if the Bank could have prevented inflation from soaring by increasing interest rates sooner, Bailey replied: ‘I don’t think we could.’
In fact, Bailey was admitting that the Bank of England, which is responsible for managing Britain’s economy, is completely powerless to do anything to stop the collapse into recession.
Since the world banking crash in 2008, the Bank, in common with central banks in the US and EU, has printed trillions of valueless money which it handed to the banks to stop them from going bankrupt.
All this worthless paper money inevitably fuelled the massive inflation that is raging throughout Britain and the world. Underpinning all this debt were zero-level interest rates that made repayments just about affordable.
Now, with the entirely predictable outcome of this attempt to keep the banks from collapsing into bankruptcy resulting in an inflationary spiral leading to a worldwide recession, Bailey and the Bank have thrown their hands up and declared they are powerless to stop it.
Equally, the claim by Bailey that no one could have predicted the imperialist war drive against Russia is also completely wrong.
The Ukrainian situation did not come out of the blue but as a result of a deliberate strategy by NATO to encircle Russia in preparation for a war to weaken it and open the way to the restoration of capitalist exploitation in the country.
At the same time, they are waging war against the working class at home to force them to pay the price while condemning millions across the world to starvation as the price to pay for the survival of a handful of bloated capitalists and their banks.
Bailey may have no solution to this crisis but the working class has.
The only way to resolve the crisis of capitalism is for the working class to mobilise its massive strength to put this bankrupt capitalist system out of its misery and consign it to history by taking power and going forward to socialism.
In Britain, the way forward is for the massive demonstration called by the TUC on June 18 to become the start of an indefinite general strike to kick out the Tories and bring in a workers’ government and socialism.