The Interest Rate Prime Evil
And so, once more, it has come to this: a repo rate hike of 25 basis points in order to curb the profligate consumer spending which has seen inflation hit ….erm, a surprisingly low 4.7% for the month of June, although the outlook for the year remains highish at 5%. And it was not brought thither by profligacy, either, but by people buying necessaries like fuel and electricity which have become more expensive through scarcity and incompetence respectively. Anyway, the repo rate has now hit 6%, and prime 9.5%, and the outlook for economic growth continues to be poor, with both supply and demand constrained against a backdrop of poor business and consumer confidence.
Comment: Look, we’re a bit thick; economists, so they assure us, are emphatically not. But there must be a better way of getting an ailing economy going than by making everyone immediately a little bit poorer.