Another Office for Budget Responsibility chart that spells out bad news for the economy, us all, and Labour, and all thanks to the Bank of England:
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Do stop blogging, I am still trying to find a silver lining in the budget and each post comes up with more negatives!
This one at least would be solved if Labour noticed your previous advice that there is no necessity to pay market interest on BoE reserve accounts that have been gifted to commercial banks via QE. If I understand right the banks can’t use that money to earn market interst rates elsewhere, so they have no answer if that free income is taken away.
Agreed
And I have stopped blogging tonight
How much of the recent and future rise in so-called “debt interest spending” is due to redemption payments on existing index linked bonds that only fall due in many years time, and how much due to the BoE’s punitive base rates increasing costs of new issuance?
Redemption provisions are recognised when the inflation happens, not when paid
Exactly so. But if inflation continues above the expectation on issue, we’ll continue to recognise those increasing redemption provisions as “payments”. And the elevated base rate will mean there are also actual interest payments that are increased. I was wondering what the relative sizes of the two effects might be.
I will try to identify it
A “Texas rancher” eviscerates central bankers, “very smart people with them fancy degrees”. The inimitable Prof John T. Harvey. How I wish I could force Bailey and Pill to watch it! https://m.youtube.com/watch?v=CWa9-GFCq5M&fbclid=IwAR2W8rfMLg–FxyhjqIaDqBc-rNiwMuJRezleyRGwDRJu9s5hsRgMasslsQ
Very good