Bank of England stepped in to protect pension funds when the price of bonds fell so sharply. So we've been condoned believing that a financialised economy is a healthy economy, says Lord Tebbit. He would rather see us deliberately reducing the size of the financial sector - not just bailing them out.
We last had a financial crisis in 2008 (ignoring the pandemic years), and if we’re not in another crisis now, we’re well on the way to it, with mortgages rising, taxes increasing and the price of everything continuing to rise. Your spending power is being hit in three directions. But, isn’t that what central banks want? So we spend less and inflation comes down, theoretically. Yet the banks, who might not be to blame this time, are now feeling the hurt. In fact, they stand to gain from rising interest rates because they can raise their borrowing costs. This week Phil asks Steve, will the banks always win, come what may?
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