UK inflation hitting 9.4% shows Bank of England is shamefully incompetent
July 20, 2022 (Investorideas.com Newswire) The Bank of England is failing the UK with its woeful inflation management, fuelling a painful cost of living crisis, and overseeing a British pound with sinking credibility.
This is the warning from Nigel Green, CEO and founder of deVere Group, one of the world's largest independent financial advisory, asset management and fintech organizations, as UK inflation hits a new 40-year high of 9.4%.
He says: "The UK's historic cost of living crisis has officially got even worse for families and businesses across the country as inflation hit 9.4%, a fresh four-decade high.
"This shines the harsh spotlight again on how the Bank of England is failing the UK with its shamefully incompetent grip on the worst inflationary surge in 40 years.
"It underscores that the central bank was complacent and passive about consumer prices last year when the country emerged from coronavirus lockdowns."
He continues: "Policymakers at the BoE will try and defend themselves by blaming external events, mainly the war in Ukraine - which, of course, haven't helped.
"But the problems, including supply chain disruptions and massive fiscal spending for pandemic relief, were staring them in the face before the invasion. These issues did not spring out of nowhere."
The historic 9.4% inflation will likely prompt the UK's central bank to decide on a 50-basis point hike at its August policy meeting, says the deVere CEO, which also has inherent risks.
"The Bank of England has already failed on inflation with its grand-scale inaction and miscalculation early on.
"There's now another risk that it hits the brakes too hard at its meeting next month, and future ones, with excessive rate hikes, which could push the consumer-led economy into not only a short-term but a longer-term recession."
Last month, Nigel Green spoke publicly in support of the Wall Street giant Bank of America which recently claimed that the politicization of the Bank of England and a weakening economy risk turning the pound into an 'emerging-market-like currency.
He said: "The well-flagged, international and domestic concerns that the Bank of England is in danger of losing its mandate as it struggles to contain inflation, could create the perfect storm for the pound."
The deVere CEO concludes: "The Bank of England is failing, and its failure is hurting households and businesses across the country.
"If the public loses confidence in the ability of the central bank to control inflation - which is currently 7.4% higher than the bank's target - there's a real risk that people will demand wage increases to compensate, which could trigger a 1970s-style scenario that drives the cost of living even higher."
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deVere Group is one of the world's largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.
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