When the Bank of England raises interest  rates they're trying to fix inflation and  

i think inflation will come down we'll  talk about that a bit more in a moment  

they're trying to fix inflation but they're  doing nothing to fix the inequality which is  

a fundamental problem i think this is a little  bit the problem with the way economists think

so the Bank of England is raising interest rates a lot of people are worried about this what  

it means. So i'm gonna do a quick explainer  on what's going on. So the Bank of England  

is raising interest rates to deal with inflation i  think the most interesting point to realise here  

is there's a real asymmetry between the causes of  the inflation and the attempt to fix the inflation  

okay so i've talked about it a lot on this channel  so people will know, the government essentially  

gave out £450 billion pounds of cash during Covid  which is a truly truly enormous amount of money  

the way that worked at the time is the government  borrowed it from the Bank of England and then they  

gave it out um and the Bank of England pays  interest on this money so as i've said a lot  

it's very important to understand who got this  money okay, it's explained very clearly on the  

very first video on this channel "why Covid-19 is  making the rich richer" that that money was largely  

accumulated by richer people okay so during Covid  the government essentially printed and gave out an  

enormous amount of money that ended up with  the rich and they pay interest on the rich  

on the money to the rich so an enormous increase  in inequality um it was pretty much inevitable  

that this would always cause inflation because  just simply because of the enormous size of it

it's important to understand that it also causes a permanent cash flow from the government  

to the rich because the rich have this £450 billion  now and the government pays interest on the  

money it's actually the Bank of England that pays  the interest but the Bank of England is owned by  

the government so financially it's coming from the  government okay um so during Covid the government  

gave a huge amount of money out that has  been inevitably inflationary, if the government  

wanted to deal with that inflation the sensible  thing to do which is exactly what i suggested  

in the first video on this channel is i need to  take the money back which is basically taxation  

um but that's not what they're doing what actually  is happening is that the central bank is raising  

the interest rate and remember the interest  rate is the cash flow that the government pays  

to the rich who have the money so if you  look at what's happening here in both  

instances it's really bad for the government which  is the taxpayer and really good for the rich right  

during Covid they gave the rich a ton of money and  now after Covid they're increasing the interest  

rate that they paid to the rich on that money so  first the rich got a ton of money and now the rich  

are going to get even more money every year from  the government so from an inequality perspective  

and anyone who watches the channel regularly will  know, inequality is basically a cancer killing  

our economy what's happening is is basically  terrible right huge amount of money was given  

and now more money will be given every year and  that money will come from the government but also  

from anyone who is in debt which is basically if  you have a mortgage if you have a large mortgage  

as i explained in our video what is wealth  that mortgage is owned largely by richer  

people you pay interest to the rich on your  mortgage and that interest will go up you'll  

pay more interest to the rich so when the Bank  of England raises interest rates they're trying  

to fix inflation and i think inflation will come  down we'll talk about that a bit more in a moment  

they're trying to fix inflation but they're  doing nothing to fix the inequality which  

is a fundamental problem and i think this is a  little bit the problem with the way economists  

think they see the inflation but economists  have a massive blind spot for inequality  

which nothing could be illustrating more than  the way nobody's speaking about it right now  

and they're dealing with the inflation  but they're not dealing with inequality  

so inflation will come down i'm very confident  inflation will renormalise it might take a year  

or so inflation will come down but inequality will  not come down and what that means is inequality  

will be left permanently higher which will mean  that ordinary people's standard of living will  

be left permanently lower and rich people's  standard living will be left permanently higher  

so inflation will come down but these  changes in relative price levels  

mainly that energy prices and food prices and  things like rent have become permanent and also  

house prices have become permanently significantly  higher relative to wages they will remain  

so the central bank will succeed in its target of  reducing inflation but it will not succeed in re

re-normalising your living standards to what  they were before Covid, living standards will  

be permanently worse now just like they were  realistically after 2008 for ordinary people  

living standards will be permanently worse in this  country and and they will continue to deteriorate  

so how do you stop that well the way you stop that  is to reverse the damage that you did during Covid  

during Covid £450 billion pounds which is £10,000  pounds per adult was transferred from the  

government to the rich explained in our first  video that's enormous it increases inequality  

enormously um you need to fix that and the  way to fix that is by taking money back from  

the rich which is taxation and that would be a  symmetrical way of solving the problem you give  

money to the rich you want to fix it you take  money back from the rich what we did is we give  

money to the rich and then we give the rich more  money to raising inflation right through raising  

the interest rate right um so the central bank  will they'll fix the inflation but they won't fix  

inequality and the way to fix inequality would  be to raise taxes but the central bank doesn't  

control taxation right taxation is in the realm  of the government, the central bank only controls  

monetary policy which is things like interest  rates the central bank can't tax the rich okay  

so that should be when the government tax  the rich well is the government taxing the rich  

i don't think i need really to comment on  that you know the chancellor-in-law's father  

is one of the richest billionaires in the world  so the chancellor's father-in-law one of the  

richest billionaires in the world doesn't seem to  be showing any inclination to taxing the rich those  

things might be connected they might not not  for me to say um these guys are not seriously  

talking about taxes in the rich which means they  probably won't get fixed so inflation will come  

back down but living standards will continue to  decrease and decrease and decrease and decrease  

um so then is the Bank of England at fault because  they don't control taxation policy well it's not  

their fault that tax are not being raised but what  is their fault is there's a lot of very well paid  

economists at the Bank of England whose job is to  protect the economy of this country okay we know  

now that £450 billion pounds which is a truly  enormous sum of money went from the government  

to the rich during Covid it should be obvious  that that's a big causative factor in what is  

happening now. Who at the Bank of England of all  these well-paid economists is talking about it  

Andrew Bailey gets paid half a million pound  a year he's the chief of the bank of England  

is he talking about the massive increase  in cash holdings by the rich during Covid?  

i haven't heard him talk about it in fact  all he said is that ordinary people should  

not ask for pay rises well i think all the new  people should be getting pay rises right so  

the Bank of England is not a fault in the sense  that they can't raise taxes but they are at fault  

in the sense that here's a lot of very well  paid economists who should be protecting  

the living standards of people in this country  who have allowed the largest ever and quickest  

ever transfer of wealth from the government to  the rich and have simply said nothing about it  

you know if your job is to protect ordinary people  and to manage inflation and there's an enormous  

transfer of cash from the government to the  rich that causes inflation and damages ordinary  

people's lives you should at the very least talk  about it and they're not talking about it so um  

the Bank of England, look interest rates, the  market expects them to stay at about 2%  

level and to stabilize there um not ever to go higher because they expect the economy to  

stay weak, personally i think they will probably  come up and at some point come back down again  

and i expect we will see something like a zero  interest rate probably within a couple of years  

that's not what the market expects that's what i  expect um but that's because i think the economy  

will be very very weak in the long run um but  the most important thing to understand is that  

even though inflation will normalise living  standards will not normalise and that's a terrible  

message but it's the truth um and the only way  to fix that is is to is to tax the rich because  

when you increase inequality you improve living  standards of the rich and you decrease living  

standards of the rest, that's what we're going to  see, um that will not fix itself and we can only 

fix that by fixing taxation policies, i would really love anyone who works at the Bank of England

or who knows anyone who works the Bank of England to get in touch with me and talk about  

why they haven't said anything about this massive transfer of cash and wealth to the richest because i  

think that's, i would like to say it's criminal but to be  honest i think it's more a case of just stupidity  

i've worked with a lot of economists and they're  not stupid people but they seem to be phenomenally  

incurious people and i would love to know just  why nobody has spoken about it so if anyone in the  

Bank of England can get in touch and say you know  maybe maybe someone has done it and if someone's  

done it i'd love to see it but um that transfer of wealth has happened the Bank of England can't fix  

it but they can talk about it and i really wish  they did because it's getting boring just being me

good? we done? yeah