Above is a chart of the policy rates of the G7 nations. Canada and the US have higher interest rates than Britain, the Eurozone and Japan have lower. Britain’s rates are middle of the table for our G7 peers. Despite the lower rates, you really do not want to have Japan’s long-term economic problems.

Kwasi and Liz’s upsetting of the UK gilt market back in October last year does not factor into the ongoing rate-setting decisions of the Bank of England.  That temporary aberration, as jarring as it was short-term, is not a factor. The bond market vigilantes and the IFS have now been appeased. This, however, will not stop Keir conflating that sorry episode with the necessity for rate rises in the medium term to counter inflation. Keir will be repeating the whopper until the day of the election that “the Tories put your mortgage up”. It is not true, it is politics.

Central Banks set rates according to their mandate. Their mandate is price stability and the fight against inflation before full employment or GDP growth. If Rachel Reeves gets into Number 11, she will be held in the same tax and spend constraints as Jeremy Hunt. Liz and Kwasi trying to break out of the IFS/OBR balance-the-books paradigm did not go well. Reeves says she too will be obeisant to the IFS/OBR. Interest rates will still be set by an independent Bank of England to counter inflation. Mortgage rates will go up or down on that basis regardless of whomever you vote for…