Can you remember when the British Government were hellbent on controlling inflation?

The title speaks for it self, I remember when interest rates rose to almost 15% in the early 1990's. I was working with a gang of hairy arsed builders and witnessed over 50% of them crying at the extent of the increase in Mortgage payments.

Now we are praying for a rise in the interest rates, in order to give our Pensioners an increase in their pensions, along with a decent return on the long term savings, a fair percentage return. But no, they are not willing to share.

Instead of just accepting an increase in interest rates is what controls the country, the Government have interfered too much in this market, they know what they have done.

The Bank of England is responsible for monetary and financial stability and decisions are independent within the context of targets set out by the Government. The inflation target is 2% for example, and interest rates are a tool to reach that target. For the last few years interest rates have been rock-bottom in most developed countries.

I remember, and suffered from the bad old days of excessive interest rates. Not wanting to return there again. However, under the last government pensioners have been guaranteed increases of at least 2.5% per annum, or inflation/earnings growth – whichever is the higher, so they are doing quite well.

In reality this means that pensioners have seen real increases in their pensions, over and above most people’s pay increases. Certainly pensioners, like everyone else, have low earnings on their savings, but for the majority the general increase in State pensions compensates for this.