The past weighs like nightmare on the brain of the living. Tory interest rate rises 1992-2022
The Bank of England has raised interest rates to 1.75% and predicted that a recession is looming.
For those who have bothered to look at the detail of the Tory leadership ‘debate’ this plays directly into it. A key issue for Sunak and Truss is how to boost the economy (that doesn’t mean increasing wages btw as it should do and Starmer almost managed to say). Truss favours tax cuts while Sunak possibly would raise interest rates.
The actual decision rests with the Bank currently and 1.75% is the biggest rise in 25 years. Compared to that period rates are low but the impact is similar. For savers- think well off Tory members- its good news. For those trying to buy a house or raise a business loan its bad news.
The title quotation is from Marx’s Eighteenth Brumaire
It reflects the re-appearance of the Tory nightmare.
On 15th September 1992 Tony Benn recorded in his diary that the ‘Government has made a hash of the economy’. The following day the Chancellor Norman Lamont took the UK out of the European Exchange Rate Mechanism as interest rates headed briefly to 15% (they settled at 10%)
The Guardian reported the day here:
http://www.theguardian.com/business/2012/sep/13/black-wednesday-20-years-pound-erm
It was the start of major splits in the Tories over Europe in which led to the Brexit debacle of 2016 and remains a live political issue.
It was just 4 months after the Tories had won the 1992 General Election but shortly afterwards they slid in the polls and Labour had a substantial lead right through to the 1997 Election. The problem that the Tories had in 1992 is that they are supposed to be the party that knows how to run capitalism.
A sudden lurch in interest rates reminds many, particularly the many who find themselves even more out of pocket as a result that this isn’t true.
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