YESTERDAY the Bank of England hiked interest rates up to 5.25%, the 14th time in a row that rates have been increased as the Bank pushes on in its attempt to push down inflation by driving up the costs of goods, services, rents and mortgages for workers and the middle class.
Making everything more expensive, including repayments on debts that millions of workers are forced to rely on just to survive, the Bank argues will bring down inflation as people will have no money to spend meaning prices will automatically fall.
The Bank’s recipe, supported wholeheartedly by Tory Chancellor Jeremy Hunt, is that by forcing millions of workers into starvation level poverty, bankrupt British capitalism can survive economic collapse and recession.
In fact, alongside driving the working class into the gutter, the increase in interest rates inevitably leads to industry and companies being forced to close down or severely cut back on jobs.
Interest rates that in the UK after the 2008/9 banking collapse were cut to 0.1%, provided all the cheap debt that has kept these companies from going under. Now the effects of all the 14 increases are being felt and, far from rescuing the UK economy from the crash, it is propelling it over the cliff into recession and slump.
This was spelt out by the TUC on Wednesday when it urged the Bank to stop interest rate increases with TUC general secretary, Paul Nowak, warning that widespread job losses in recent months have left the UK ‘teetering on the brink of recession.’
An analysis from the TUC released on Wednesday showed that 120,000 jobs were lost between March and June this year across 11 separate industries with ‘skyrocketing’ interest rates the main factor.
The largest losses were recorded in accommodation and food (34,000 losses), wholesale and retail (27,000) and construction industries (17,000).
Companies are increasingly running out of cash as the cost of servicing their debt and paying increases in the price of raw materials forces them to either close down or cut back on jobs, and run down stock in order to save money.
Nowak, in an appeal to the Bank, said: ‘With the country teetering on the brink of recession, the last thing we need is another hike in interest rates. This will just heap further misery on households and businesses and put many thousands more jobs and livelihoods at risk. Setting us on course for another economic shock is reckless – not responsible.’
Along with calling for the Bank to act responsibly, Nowak declared that the Tory government ‘needs to deliver strong, shared, growth, rather than an economy that is stagnating or shrinking’.
Nowak is right to be alarmed as the TUC is forced to confront the fact that the only way the bankers and bosses of the big corporations can hope to survive is by making the working class pay for the capitalist crisis.
The Bank and the Tories have no answer to the crisis except to let mass unemployment rip through the country, as the weak industries and businesses go to the wall, in the hope the banks and multinational corporations can keep staggering on making profits for their shareholders.
Adding to Nowak’s alarm, is the knowledge that the working class will not passively accept seeing its lives destroyed through mass unemployment, its families being forced to go hungry and constantly facing having their homes taken from them as rent and mortgages become even more unaffordable.
The working class has the power to put an end to capitalist crisis by forcing the TUC to immediately organise a general strike to kick out the Tories and bring in a workers government that will seize the Bank of England, expropriate the bankers and bosses of the major industries placing them under the management of the working class under a socialist planned economy.
The TUC Congress is meeting from Sunday 10th September in Liverpool – join the lobby called by the Workers Revolutionary Party on Monday 11th September to demand that the TUC call a general strike to bring down the Tories and go forward to a workers government and socialism.
This is the only way to resolve the crisis by putting an end to capitalism with a socialist revolution.
