Bank of England is damned by House of Lords committee for not bringing down inflation

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WHEN Tory Prime Minister Rishi Sunak and his Chancellor Jeremy Hunt boasted last week that they were responsible for bringing down the official inflation rate they were met with derision from even the most faithful of Tory-supporting media.

Everyone knew that the fall in inflation had nothing to do with the policies of the Tories or the Bank of England but was solely down to a decrease in the price of oil.

The working class certainly was not rejoicing, as the attempt by the Tories to claim victory over inflation was swiftly followed by the news that the increase in the energy price cap by 5% would add an extra £94 to a typical gas and electricity bill.

Despite all the official figures being pumped out to ‘prove’ that bankrupt British capitalism has turned the corner, the reality for tens of millions of workers and their families is that, as the coldest months in winter approach, heating their homes will become simply unaffordable.

At the same time, food costs are still soaring way beyond any official figures on inflation, remaining at the historic high of 10% and predicted to grow throughout next year.

According to a report published yesterday by the Energy Climate Intelligence Unit, British household food bills have been driven up by more than £600 over the past two years – with more to come in 2024.

Alongside this, a new report from the Office for National Statistics revealed that 345,000 businesses across the UK closed down last year – a 5% increase on the year before and the highest figure of business ‘death rates’ since records began in 2002.

With inflation defying all attempts by the Tories and the Bank of England to bring it under control, and the working class already rising up refusing to tamely submit to being forced into starvation, the BoE has been targeted as the culprit responsible for inflation and recession.

In a report published yesterday, the House of Lords Economic Affairs Committee damned the BoE for its reliance on ‘inadequate’ forecasting models and a lack of ‘intellectual diversity’ in its senior ranks as a major contributory factor in inflation running out of control.

The report cited ‘errors’ by the Bank, mainly telling everyone that it was ‘transitory’ and would soon be brought under control by 14 increases in the interest rate.

This, the report said, had ‘fuelled a dramatic fall in public confidence’, while the increased remit of the Bank to carry out government policies had jeopardised its ability to ‘prioritise price and financial stability.’

This, the report says, ‘risks drawing it (the BoE) into the government’s wider policy agenda; and increases the potential for conflict between the Bank’s objectives.’

This appears to be aimed at the Liz Truss disaster of last year when her massive, unfunded tax cuts to the rich tanked the UK economy and forced the Bank to intervene by pumping billions more in order to prevent the entire country going bankrupt and driving up the already massive national debt.

In other words, the Lords are telling the BoE to clear out all the intellectual deadwood and bring in a cadre of bankers prepared to dictate to any government what is necessary in the interests of the bankers and bosses.

While damning the Bank for its ‘errors’, the report itself offers no solution to the inflationary crisis strangling British capitalism, except to demand the unfettered rule of the bankers to impose the crisis on the backs of the working class.

With no economic solutions remaining to hold back the dive into recession, the only way out for the capitalist class is to wage a class war to the finish against workers and their trade unions to make the working class pick up the bill for capitalism’s crisis.

On Saturday 9th December the Trades Union Congress has convened a special Congress on the Tory anti-strike laws.

We urge thousands of workers and youth to lobby this Congress to demand that the TUC immediately call a general strike to bring down the Tories and bring in a workers’ government that will expropriate the bankers and bosses and bring in a planned socialist economy.