RE: Totally O/T24 Jun 2023 23:10
It’s an interesting one. For years in the 1970-1980s in (West) Germany the central bank set interest rates, while in the UK it was the cabinet who decided. Germany kept a far better hold of inflation, and Sterling declined. I can remember 8DM to £ in 1971, yet this was about 4DM to £ in 1981! Germany had a much better performing economy. In the Brown-Blair period they gave the responsibility to the BOE, thinking that central banks were superior to politicians with these decisions. It is debatable, and probably we should have raised the rate shortly after the 2008 crash around 2.5%-3%. However, the BOE has become an easy target of criticism for politicians and others. Perhaps it’s time again to start trusting the Cabinet more than the BOE on interest rate decisions!