Continuous talk about interest rates needing to go up in the future is also impacting, I'd say. For a huge number of people, it's only low mortgage rates that are keeping their heads above water.
Anyone with any modicum of economic nouse can discern that the causes of inflationary pressure is not demand-pull, rather that it's the global cost of fuel & commodities. And therefore raising interest rates will do nothing to alleviate these inflationary pressures, save give a small boost to the £'s value, and create a mirage of imported fuel/commodities being slightly less expensive. But this would only be temporary, as the £'s value would fall back as the economy suffered from the hammering mortgage holders would take from higher mortgage payments.
It seems to me that those calling for an interest rate rise are either blinded by a slavish devotion to monetarist ideological dogma (ie, not living in the real world) or have the ulterior motive that an interest rate rise would financially benefit them, as they're wealthy enough not to have a mortgage, whilst having savings.
Pure monetarist economic theory is as ridiculously pointless as any other pure economic theory when applied to real life. There needs to be a mix, a balance of different economic theorem to provide the flexibility to address the multitude of different macro economic circumstances, as the causes of each are then also many and varied.
Martin
Home: St Helens (26m asl) Work: Manchester (75m asl)
A TWO addict since 14/12/01
"How can wealth persuade poverty to use its political freedom to keep wealth in power? Here lies the whole art of Conservative politics."
Aneurin Bevan