Season 1 · Episode 357
The Bank of England’s totally wrong response
Hiking interest rates don’t resolve supply-driven inflation. So why are central banks doing it? It’ll only make matters worse.
Debunking Economics - the podcast · Steve Keen & Phil Dobbie
June 28, 202337m 6s
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Show Notes
The UK economy is ready for a major downturn. In part it’s down to supply chain difficulties, thanks to COVID, the war, the great resignation, sickness and, let’s not forget, Brexit. Originally central banks recognised this and said the inflation was transitory and we just needed to ride it out. Since then, they’ve gone back to their conventional thinking that inflation can only be fought with interest rates. The higher the better it seems. But Prof Steve Keen tells Phil Dobbie that it is the worst response possible, causing unnecessary suffering and cutting back on the kind of investment that could fix the supply chain difficulties. So why are they doing what they are doing?
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