THE Bank of England has raised UK interest rates to their highest level for 14 years as it battles to stem soaring prices, by deepening the capitalist slump and adding to the number of companies going bankrupt, driving up the numbers of unemployed workers.
The Bank increased rates to 3.5% from 3%, marking the ninth time in a row it has hiked interest rates. The rise will mean higher mortgage payments for homeowners and those with loans at a time when many people are struggling with the cost of living.
It will also bankrupt the businesses that depend on credit from the banks, and lead to a slump and a business and banking collapse.
Inflation – the rate at which prices rise – has been increasing at its fastest rate for 40 years as the cost of food and energy soars, driven up by the imperialist support for the Ukrainian fascists. Announcing its latest rise, the Bank indicated it was likely to continue to increase interest rates next year, and that the current rise was just the start of the drive to super-austerity.
Homeowners with variable rate mortgages or first-time buyers looking to get on the property ladder will face much higher costs.
Following the most recent rate rise, people on a typical tracker mortgage will pay about £49 more a month while homeowners with a standard variable rate mortgage face a £31 jump.
The bankers’ move can only accelerate the developing economic collapse, with big companies failing, workers pay falling, the big banks collapsing and mass unemployment soaring. The government is now broke and its capitalist system is tottering, meaning that public services such as the NHS and education will be slashed and knifed.
The move comes as millions of people are already under fierce pressure as the cost of living races upwards and wages fail to keep up, with many families unable to heat their homes or feed their children.
Regular pay grew by 6.1% in the three months to October, according to the latest official figures. But taking inflation into account, wages actually fell by 2.7%.
Chancellor Jeremy Hunt said high inflation was a global problem and that raising public sector pay for nurses would make the situation worse. Anger over how workers wages have already been slashed by soaring prices has led to the current strike wave.
‘I know this is tough for people right now, but it is vital that we stick to our plan, working in lockstep with the Bank of England as they take action to return inflation to target,’ said Hunt.
He added: ‘The sooner we grip inflation the better. Any action which risks permanently embedding high prices into our economy will only prolong the pain for everyone, stunting any prospect of economic recovery.’ It’s thumbs down for the postal workers and the nurses!
The Bank actually has the gall to say that it had seen evidence of firms raising wages to recruit workers and warned if this continued it would require it to raise interest rates faster and further.
It is the working class and the middle class that is once again set to be forced to pay for the crisis of capitalism, with more savage anti-union laws to cripple unions so that millions of workers and their families will starve.
There is only one way out of this developing worldwide catastrophe for capitalism.
This is for the working class to sack its current reformist leaders who are refusing to call a general strike, to bring down the bosses and bring in the nationalisation of the banks, oil companies and building societies, to bring in a planned socialist economy that will meet peoples needs.
The working class desperately needs a new leadership. This is the time to rapidly build up the leadership of the Workers Revolutionary Party and the Young Socialists to lead the British socialist revolution to put an end to the dog-eat-dog capitalist system and bring in a planned socialist economy whose motto will be: ‘From each according to their ability – to each according to their need.’
We urge workers and youth to join the WRP and the Young Socialists today. The time has arrived to organise the British socialist revolution as part of the worldwide socialist revolution to get rid of the capitalist system before it gets rid of humanity!
