The announcement today, by dropping the Bank of England’s basic rate from 05% to 0.25% the UK government — Theresa May’s brand new Cabinet and the Treasury Department — means that they must be really worried that the economy is about to nosedive. The BoE has also been told to do what all the main currency blocs — China, Japan, America and the European Union — are doing . . . more Quantitative Easing. And then there’s an extra dodge of our own — a scheme to force the banks to pass on lower interest rates to households and businesses.
All this is — again — kicking the can down the road. It’s avoiding at all costs the continuation of a mild deflation which could have brought about the healthy bankruptcy of insolvent businesses all by itself in due course. It’s also avoiding the physical separation of the four big high street banks into say, a dozen or more regional banks as well as avoiding hiving off their speculative trading into true investment banks.
So on we go — plunging ahead into the mist of not bringing about a stable world trading currency and thus allowing the present massive imbalances of debt between countries and within them, to build up further. Until the next currency collapse.