MP and Treasury committee member Pat McFadden labelled the Bank of England an “unreliable boyfriend” because of their uncommitted stance over interest rate rises. He accused the Bank of not giving enough information over the timings of future interest rate rises. Mr McFadden said that businesses and consumers had been “left not really knowing where they stand” by the Bank of England.
“We’ve had a lot of different signals,” he said. “I mean it strikes me that the Bank’s sort of behaving like an unreliable boyfriend. One day hot, one day cold, and the people on the other side of the message are left not really knowing where they stand.” Mark Carney, the Governor of the Bank, retorted that the Bank’s guidance had reinforced economic recovery. He added that the interest rate rise would be fluid and “driven by the data.”
The truth behind Mr Carney’s actions is likely that he wishes to bring forward the interest rate hikes to before the end of the year. Just last year the Governor was talking about interest rate hikes being many years away and now they have been brought forward by over a year. The reason for the discrepancy between the outlook of the consumer and the outlook of the banks is due to the banks knowing the true state of the economy. Zombie business being propped up by cheap cash handed out by banks on behalf of the tax payers, through the government which is fuelling the house price bubble to please the banks. Yes, the Bank of England is acting like an “unreliable boyfriend” and we may be about to go through an acrimonious break up.