UK inflation at 9.4% shows Bank of England shamefully incompetent :: InvestMacro


Written by George Pryor

The Bank of England is failing the UK with its unfortunate management of inflation, fueling a dire cost of living crisis, and overseeing the British pound with sunken credibility.

That’s the warning from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech firms, that UK inflation reached a 40-year high of 9.4%.

He says: “The UK’s historic cost-of-living crisis has officially gotten worse for families and businesses across the country, with inflation at 9.4%, its highest level in four decades.

This once again highlights how the Bank of England has let the UK down with its shamelessly inept grip on the worst inflationary increase in 40 years.

“It confirms that the central bank was complacent and negative about consumer prices last year when the country came out of lockdown due to the coronavirus.”



He continues: “BoE policymakers will try to defend themselves by blaming external events, in particular the war in Ukraine – which, of course, did not help.

But problems, including supply chain disruptions and massive financial spending for pandemic relief, were staring her in the face before the invasion. These issues didn’t come out of nowhere.”

Historic inflation of 9.4% is likely to prompt the UK central bank to decide on a 50 basis point increase at its August policy meeting, says deVere CEO, which also has inherent risks.

The Bank of England has already failed on inflation due to its massive inaction and miscalculation early on.

“Now there is another risk that he is pressing the brakes hard at his meeting next month, and the future risk, with excessive interest rate increases, could push the consumer-led economy into recession not just in the short term but in the long term.”

Last month, Nigel Green spoke publicly in support of the Wall Street behemoth Bank of America, which recently claimed that the politicization of the Bank of England and a weak economy threaten to turn sterling into an “emerging market-like currency.”

“The well-reported international and domestic concerns that the Bank of England is in danger of losing its mandate as it struggles to contain inflation, could create a perfect storm for the pound,” he said.

The chief executive of deVere concludes, “The Bank of England is failing, and its failure hurts families and businesses across the country.

“If the public loses confidence in the central bank’s ability to control inflation – which is currently 7.4% above the bank’s target – there is a real risk that people will demand wage increases to compensate, which could lead to a 1970s-style scenario that increases the cost of living “.

Around:

deVere Group is one of the world’s largest independent advisors for specialized global financial solutions to high-income and high-income international and local clients. It has a network of more than 70 offices worldwide, more than 80,000 clients and $12 billion under advice.


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