UK household savings have sunk to record lows. The UK's current account deficit has reached a record high. Our so-called recovery is really just more debt and more overspending. And it's all because of the monetary policy that was meant to fix our economy.
The reason people aren't saving is simple: the Bank of England has taken away the incentive. For the last seven years, the Bank of England has kept interest rates absurdly, artificially low – lower even than inflation. When investments no longer yield a decent return, why should people save?
Effectively negative interest rates have transferred wealth from the poor to the rich. They have subsidised the banks at the expense of the people. Worse still, they have perpetuated the excesses that brought about the financial crisis. Instead of fixing a failed system, the Bank of England has propped it up, and rewarded its worst offenders for failure.
Broken banks and overflowing debt are proof we live in a centrally planned economy. In a free market, bad banks would have gone bust and interest rates would match the risk of investing. Instead, at the core of a supposedly market economy, central bank bureaucrats set the price of capital.
Our economy is stalling because it increasingly rests on what Hayek called the fatal conceit: the idea that a tiny elite can allocate resources better than the millions of minds that make up the market.
Central economic planning – whether in Threadneedle Street, or Whitehall, or Brussels – is holding our economy back. Trusting the same elites and policies that got us into the mess to get us out of it is madness. To rebalance our economy, we need to trust the free market.
"A revolutionary text ... right up there with the Communist manifesto" - Dominic Lawson, Sunday Times
Printed by Douglas Carswell of 61 Station Road, Clacton-on-Sea, Essex