Some time ago, I think it was the 1970s, some economist/politician came up with the idea that controlling spending reduces inflation. This in some ways is true and logical – In this modern neoliberal age profit is all, so if demand is high prices up can go up. Assume too people have a limit to what they will or can pay for goods & services, so logic says if you price them too high they won’t buy or won’t buy as often. So putting interest rate up could slow demand. But this is not true in every case.

If money is tight, wages low and basic living costs high for other reason, why would anyone think putting interest rates up, making things cost even more is logical? Of course, it’s not, any ten-year-old would tell you that. It’s a political move that governments get away with it because the main stream media are idle & corrupt – in this case the corruption is they will go along with the theory because it makes good content, and they have already stockpiles of old stories they can rehash to make more.

The fact is, government are just covering their own backs with this excuse. Shifting the focus on to you the consumer and spinning a yarn that this suddenly happened, and they didn’t course it. When in fact they did and their paymaster are demanding they do something. The only reason of interest rate rise in these circumstances is to replenish funds and to rebuild profit margins for the banks & institutions. It’s easy to see this when you notice the interest rates falling, but the prices have not fallen & demand has not fallen.