We've lost faith in Bank of England

Bank of EnglandPA

It's pretty hard to remain a trusted pillar of modern society when you're personally overseeing the near-collapse of the banking system. Likewise it's not going to do your reputation a great deal of good when you're in charge of controlling runaway inflation and your primary activity seems to be to sit on your hands.

The Bank of England hasn't exactly been covering itself in glory over recent years, and as a result faith in it as an institution has fallen to a new low.

Disatisfaction

According to a report in the Guardian, research by GfK NOP has revealed that only one in three people are happy with the way the Bank of England has been setting interest rates. Meanwhile, those who are actively dissatisfied has hit a new high of 25%. The balance of those who are impressed and unimpressed is the worst since the survey began in 1999.

There's certainly room for some argument, After-all, we have seen inflation running at at least twice the target rate for the whole of this year.

Unfair criticism

However, it begs the question of what people actually have in mind. None of us like inflation, but would higher interest rates really have helped? They wouldn't have made fuel or groceries any cheaper, so they wouldn't have made it any easier to make ends meet. At the same time they would have pushed mortgage payments up - smashing many household budgets to smithereens.

As the Bank has often argued. It's only an effective lever when inflation has fed into wage increases and is endemic in the system, and as we are all too well aware, there's little chance of that happening.

Sometimes the right thing to do is nothing at all. However, it's hard to convince people of this when they see inflation running out of control and the Bank doing nothing.

But what do you think? Do you support the Bank? Let us know in the comments.
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