'Interest rate rise is a financial disaster for Mansfield residents' warns mayor

Notwithstanding the financial consequences of the war in Ukraine, Covid and the mismanagement of Brexit, the blame lies squarely with the Government.

Their wreckless unfunded mini budget without any recourse to the Office for Budget Responsibility caused the Bank of England to commit up to £20 billion to buy bonds to prop up the pound to prevent our currency being ravaged by the international money markets.

This huge amount of money has been wasted as a direct result of Government incompetence and could have used to lessen the rise in interest rates that is yet another assault on working people’s cost of living.

I am not a financial expert, but the Bank of England’s raising interest rates now just doesn’t make any sense to me.

Interest rate rises are usually used as a tool to suppress public spending in an “overheated” economy and interest rates are usually lowered to stimulate the economy when it is in recession.

Could someone explain the logic?

We are already in a recession and many businesses rightly supported financially during Covid, costing the tax payer billions of pounds, are in danger of bankruptcy because of the additional costs as a result of the interest rate rises.

All this billions of investment will then be down the drain.

Financial experts have criticised the Bank of England for reacting too slowly and I agree. There was a lot of money built up during Covid, because people could not go out and spend it.

That should have been the time for interest rate rises, because demand exceeded supply, causing inflation.

We are meant to rely on “financial experts” in Government and the Bank of England to be forward thinking “in front of the curve”.

They have let us all down.

The only logical reason I can think of now is the Bank of England in imposing such a damaging increase in interest rates in an attempt to show to financial markets they are “being tough” and back in control?

However, it is far too late, as they are also predicting the longest recession in our lifetimes.

Inflation is already starting to come down on its own, because families have less money to spend, because of the horrific rises in the cost of living they are having to deal with.

Making ordinary working people pay even more through the interest rates rise will be counter productive and is going to crash the economy even further.

With the Government once again exacerbating the dire economic situation with delays to their Autumn statement and promising a massive cut in spending, we seem to be heading for a economic disaster.

I fear for Mansfield’s residents and the country as a whole.

Without investment and help for businesses, thousands of people will become unemployed and there will be no growth to generate the taxes needed to pay back our national debt, which in turn will delay the start of the long journey to improve the lives of Mansfield’s residents.

Where is levelling up?