Responding to the Bank of England’s inflation report, Fran Boait, Executive Director of Positive Money, said:
“The Bank of England is leading with the message that “the economy now needs a little less support.” But the question is what parts of the economy should be supported – financial markets or the rest of the economy?
“The Bank’s cocktail of record-low interest rates and quantitative easing has served to support financial markets by inflating asset prices. Investors have been panicking as central banks hint at tighter policy, in response to signs that wage growth may finally be picking up.
“It’s a sign of how distorted our financial markets have become, that wage growth becomes a cause for alarm. The Treasury must now work with the Bank of England to ensure that low rates and QE are replaced with more sustainable policies to support the real economy.”
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Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, we are a not-for-profit company funded by small donors, charitable trusts and foundations.