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That 1/3 makes a pretty huge difference... And more importantly she was announcing these policies at an exact time when the Bank of England was trying to raise
by actionablefiber 4y ago
That 1/3 makes a pretty huge difference...
And more importantly she was announcing these policies at an exact time when the Bank of England was trying to raise interest rates and sell bonds to fight inflation. So you have the government and the central bank pursuing contradictory goals: one trying to jumpstart consumption by borrowing and spending and the other trying to cool it by raising the cost of borrowing and reducing spending. This lead to a lot of wasted time, money and efforts and really destroyed the government's credibility.
- neilwilson 4y agoIt wasn't a contradictory goal. The sect Truss belongs to considers that aggregate demand is solely a matter for the central bank to sort out, and that it has to respond to the fiscal setting of the government. Not the other way around. This is enshrined in law at s11 of the Bank of England Act 1998. "In relation to monetary policy, the objectives of the Bank of England shall be— (a)to maintain price stability, and (b)subject to that, to support the economic policy of Her Majesty’s Government, including its objectives for growth and employment."
- actionablefiber 4y agoThe BoE had to completely flip its policy to rescue pension funds which were getting margin calls because of Truss and Kwarteng's mini-budget destroying the gilt market, so I guess you're right.