Bank Of England's Late Attack On Inflation Is Costly

Alex Brummer wrote a blog for the Daily Mail.

Blog section published and updated on May 23, 2023 at 10:23 PM BST.

The Bank of England can't stop inflation, and it's hurting the country a lot.

Governor Andrew Bailey gave a speech to MPs today. He talked about the Bank's policy for big shocks. The Bank needs to work hard on this. Today's data is about consumer prices in April.

Huw Pill, the chief economist, said that the analysts at the Old Lady didn't expect the big changes in food and energy prices because their models couldn't handle extreme changes.

Prices going up by double digits are hurting productivity because the cost of living has been affected.

The International Monetary Fund changed its prediction for the UK's growth rate. It now says the prediction could have been better if Britain didn't have to take steps to control inflation. The steps include tightening fiscal and monetary policy.

The Bank of England's Andrew Bailey mentioned uncertainty in his talk with the Commons. He said that the bank needs to consider how it manages monetary policy during difficult times.

The Fund thinks it will take until mid-2025 for UK headline prices to reach 2%.

Good news for Prime Minister Rishi Sunak, IMF predicts inflation will decrease to 5% this year.

The government promised it. The Bank didn't fight inflation soon enough. Keeping interest rates low for too long is becoming expensive.

New borrowing numbers reveal the budget deficit increased to £25.6 billion in April. This amount is higher than the estimated amount in March by £3.1 billion.

The Office for Budget Responsibility said that the big reasons for more borrowing are interest payments on the national debt that went up by £3.1 billion compared to last year, and more spending on welfare.

Prices are going up. Two things won't change that.

Around 25% of UK's national debt is in gilts linked to inflation.

Pay deals in public sector and uprate in pensions won't help with cost of living. Bailey and the cautious Monetary Policy Committee made mistakes that hurt everyone.

BT is facing difficult times. The boss, Philip Jansen, wants to cut 55,000 jobs by 2030. This is because the company is finishing its work on full fibre broadband.

Patrick Drahi, who owns Sotheby's auction house, has increased his ownership of BT to 24.5% from 18%.

Drahi said he's not buying BT. He won't do it for six months at least. So, it's not an option for now.

He's not just a talker; he's a doer. His previous business choices show that he's not content with making noise and cashing in.

He loves telecoms and has worked in France, the US, Portugal and Israel.

It seems like Drahi invested in BT for a good reason and he plans to stick around for a while.

His commitment shows that investors like the UK. This is despite opposition parties trying to make people doubt it.

Drahi won't join BT board. Maybe, he and Jansen want to improve UK infrastructure. They both want to get value from it. Drahi and Jansen work together.

BT is changing. They have a new broadband network for the future. They also have EE, a popular mobile network. BT might make more deals because of this. They think they will make more money this way.

Drahi won't just wait and do nothing.

Activists tried to approach the stage during Shell's London annual meeting. This could justify M&S chairman Archie Norman's proposal for online shareholder meetings. Norman launched the campaign in The Mail on Sunday. His plan aims to allow shareholders to have regular access to directors.

I disagree. AGMs are sometimes boring and attract strange people who just want free food and drinks, but they have a good reputation for making a difference.

People pushed Barclays to stop doing business with South Africa during Apartheid. The pressure worked. Barclays stopped investing in South Africa. Other companies followed suit. The bad government lost power. The pressure helped make that happen.

Shell needs to think about green targets more. Follow This is trying to bring more environmental voices to the board. Like what happened at Exxon, it could happen at Shell too. Even if they try to ignore it, it won't work forever.

Bank Of England's Delayed Attack On Inflation Is Costly

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