Why the Bank of England’s decision on interest rates is disappointing - Yorkshire Post Letters

I was disappointed by the Bank of England's (BOE) recent stance on interest rates but dismayed when the Chancellor of the Exchequer, Jeremy Hunt, enthusiastically agreed that they should remain at 5.25 per cent.

Is this credible? An opportunity missed to revive the Conservative Party's fortunes and avoid a washout at the general election, Hunt should be up in arms.

Bold policies are needed to differentiate Conservatives from Labour. The parties are virtually indistinguishable, except that one has failed, and the other is about to follow suit. Both parties offer the same Liberal/left Blairite policies, which have endured since New Labour was in office, resulting in virtual stagnation and underfunded public services.

Leading Tory politicians, in particular, are timid and shy away from political innovation at home. At the same time, the Foreign Secretary, Lord Cameron, seems intent on making matters worse abroad.

Interest rates were raised as a knee jerk reaction to cost-push inflation, which has fallen unaided despite the Government taking the credit. The BOE created an unnecessary crisis for mortgage holders as the lenders made millions from the gap between rates on savings and loans, and recession loomed.

If interest rates are cut, the pound will fall. This is good for export business and subsequent economic growth, averting the need to raise taxes to finance public services.

The BOE administered the only cure it possesses for the wrong disease; the Financial Conduct Authority (FCA) has become compromised by political ideology (140,000 small businesses have been de-banked). And our politicians seem ignorant of supply and demand economics when we require an intelligent mix of both. We desperately need a decentralised banking system with much smaller local banks serving the community and local businesses, especially manufacturing.

But banks are not alone. Local authorities are heading in a similar wrong direction with the creation of unitary authorities, meaning less local accountability and the creation of mayoral fiefdoms. Devolution is no panacea, as we have learned from Scottish nationalism, and should be treated cautiously.

I raise these issues as they are to the detriment of the man in the street, which is the chap the authorities are there to serve, not self and vested interests, as is often the case.