Douglas Carswell

20 JAN 2016

The Bank of England's plan has failed

The economy is meant to be sorted by now, isn't it? The Chancellor told us he'd fix the roof while the sun was shining. The Bank of England said it would lead Britain back to prudence and prosperity. But now another downturn is approaching, it's clear our overlords have just repeated the mistakes of the past.

Yesterday, the Governor of the Bank of England, Mark Carney, announced he wouldn't be raising interest rates from record lows until at least next year. "The world is weaker and UK growth has slowed," he explained. "Now is not yet the time to raise interest rates."

But when is the time? The Bank originally cut interest rates to 0.5% in 2009 as a temporary measure to deal with the financial crisis. They were meant to be raised again in 2010. Seven years later, the rates still haven't changed. Clearly the Bank's plan has failed.

The real reason Mark Carney won't touch interest rates is that our banks couldn't survive a rise. They are totally dependent on artificially cheap capital. Quantitative easing and ultra-loose monetary policy hasn't saved us from economic collapse. On the contrary: it has just redistributed more wealth from taxpayers to a crony cartel of Big Banks, and propped up a failed financial system.

The financial crisis was caused by seven years of massive public subsidies to the financial sector by central banks and central Government. And what have our wise leaders done to make sure it doesn't happen again? Another seven years of public subsidies to the financial sector. Well guess what: if you make the same bad decisions, you can expect the same results.

The UKIP Parliamentary Resource Unit recently published a paper on the need for real banking reform. Our paper makes the case that to avert economic disaster, the Government needs to stop rewarding bankers for failure. This time, let's not repeat our mistakes.

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