BoE ‘Jelly Babies’ need to show some backbone and slash interest rates NOW | Personal Finance | Finance

If BoE rate setters on its monetary policy committee (MPC) lived in the real world, we’d all be getting excited about lower borrowing costs. Unfortunately, they don’t. Like Basset’s Jelly Babies in the old TV ads, they live in a wibbly, wobbly world of their own, and we’re all paying the price.

MPC members exist in a rarified realm of data, tables and forecasts, but those forecasts rarely coincide with reality.

Worse, the MPC knows this, but it still slavishly follows them, because doing otherwise would involve original thought, and Jelly Babies aren’t up to that.

The MPC contains nine members, including BoE governor Andrew Bailey, to give it a range of voices and views. But what’s the point if they all think the same?

If MPC members didn’t sign up to BoE group think, they wouldn’t have been appointed in the first place.

It’s not just me saying that. In November, a House of Lords report blamed today’s inflation nightmare on “a lack of intellectual diversity within its most senior ranks”.

Again, it reminds me of those wibbly, wobbly Jelly Babies. They come in green, yellow, red, black… but all taste broadly the same.

The Lords also slammed the BoE’s “inadequate” forecasting models, something I’ve been banging on about for ages, labelling it the world’s worst forecaster.

The respected Centre for Business and Economics Research (CEBR) says the MPC should have know throughout the cost-of-living crisis that BoE forecasts were “largely inaccurate”.

Yet they refused to accept it.

While inflation has been resurgent worldwide, the UK has been hit far harder than most and that’s down to the BoE’s failure to see the danger coming.

Now it’s making the opposite mistake, by refusing to accept that inflation is on the run.

At midday on Thursday, the MPC will announce its latest rate decision, and NOBODY expects it to do the right thing and cut rates from today’s 5.25 percent.

Rates will stay where they are while Andrew ‘Jelly’ Bailey and his stretchy, squashy team of rate setters examine all the wrong data and come to the wrong conclusion at the wrong time.


Cutting rates would take a little bit of backbone. Which is something Jelly Babies don’t have.

This is a disaster because we really need that rate cut. It would ease pressure on 1.5 million mortgage borrowers whose fixed rates will expire this year, and face paying up to £500 extra a month.

Swift action could spare thousands the agony of losing their homes and help the UK swerve a recession. It might ease the pressure on food banks, too.

Inflation did creep up slightly in December, but that’s likely to be a blip. Latest British Retail Consortium data shows shop price inflation plunged in January to 2.9 percent, sharply down from 4.3 percent in December.

Forecasters at Dutch bank ING reckon inflation will drop below the BoE’s two percent target as early as April.

Yet last month, two MPC members voted for an interest rate hike!

READ MORE: Expert says there’s ‘still time’ to save UK economy from ‘rock bottom’ recession

Worse, highly renumerated BoE staff are blaming inflation on us. Economist Huw Pill says our massive pay rises are driving wage-price inflation and we have to accept being worse off.

That’s another sign that they don’t live in the same world as us.

As well as lifting households and businesses, an interest rate cut would ease burden on the government coffers, by driving down debt repayments.

MPC members need to see and hear what’s happening to households, businesses, the high street and other corners of our beleaguered economy.

Sadly, that requires eyes, ears, brains and a heart, and Jelly Babies don’t have any of those faculties.

Maybe I’m being too harsh. On Jelly Babies. I’m a big fan, I just don’t want them running the economy.

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