Higher interest rates will strengthen household spending, Bank policymaker says

The article does not explain how Higher interest rates will strengthen household spending – but perhaps Ms Mann could? ...in light of persistent inflation", despite overly high interest rates over many years, suggests an inaccurate diagnosis and an inevitably flawed policy response. As Einstein said insanity is doing the same thing over and over again and expecting different results. So why is the BoE still sticking with them? Apparently, "elevated inflation and expectations". Let's tackle that first. I challenge Catherine Mann to find an economics textbook anywhere that demonstrates that interest rates can control inflation. In the absence of that, perhaps recent history in the UK could show this - but it does not. Years of this policy has resulted in lost opportunities and mismanagement, to the enormous cost of households and small businesses. That means hardship for people. Voters too! Anyone listening in Threadneedle Street? Or Downing Street? The BoE has failed to understand inflation and its (various) causes. Even though the first bout of the current inflationary period can be laid at the feet of imported oil and gas, the BoE raised interest rates. How was that ever going to have an impact on external sources? There is a recognised way of controlling inflation, which the nominally independent bank and the government want to ignore for wholly political reasons, not economic. That is by adjusting the money supply using taxation. Yes, the holy cow of fiscal management... If these venerable organs of the state wanted to be helpful (what?), they would focus more on the "weak consumption which...(is)...weighing on overall economic growth". Not to mention our hunger for food - and fairness. Households need more income, workers need to be paid more and benefits and pensions need to rise. While some inflation would be inevitable, taxation could be used to maintain that at about 2%. The annual deficit, accumulated in the 'national debt' (don't be frightened, children), is usually sufficient to maintain liquidity in the economy. We need to completely reform the tax system to ensure both horizontal and vertical equity - for example, by taxing investment returns at the same rate as income, and ensuring taxation is progressive, without loopholes for the ultra-rich. And a fully empowered, approachable, contactable and helpful tax authority, with offices in every town. Successive governments have lost our confidence. Next to go should be the BoE and the think-tanks that purport to advise them and us. But mostly the absurd and prejudicial neoliberalist 'trickledown' model. It is obvious what an independent Cymru must not do!