The Chancellor Jeremy Hunt has admitted for the first time that the massive money printing in the pandemic – more than in the whole previous decade – contributed to the current sky-high inflation.
Speaking at the Centre for Policy Studies fringe event at Conservative Party Conference this afternoon, Hunt explained that it is the impact of inflation on debt interest payments that means there can be no tax cuts. The Spectator‘s Kate Andrews has more.
As inflation tends to be a monetary phenomenon, it makes sense that quantitative easing had a direct impact on price spirals, and some are willing to point this out.
Former Chief Economist to the Bank Andy Haldane was warning about the effects of money-printing on prices back in June 2021, when the rate of inflation was just starting to rise. Former Bank Governor Mervyn King has been saying since last year that ‘too much money’ contributed to the inflation spiral. Economist Julian Jessop wrote on this topic for Coffee House last month, noting how the annual rate of inflation has roughly followed the growth rate of broad money. Yet it’s been in the interest of both ministers and central bankers to avoid addressing the role of money-printing directly: better for the crisis to be something they’ve been forced to respond to, rather than something they helped to cause.
But this afternoon Jeremy Hunt cautiously added his name to the list. Asked what he thought had contributed most to the inflation crisis – the war in Ukraine, money printing or a wage spiral – he said:
I hate ducking questions. I don’t think it’s quite as straightforward as ranking them one, two, three. I’d definitely put Russia’s war in Ukraine at the top of that list. I think that quantitative easing… I think it is reasonable to say we collectively underestimated the impact of that. Although in fairness to the Bank of England they did start to raise interest rates before everyone else.
Threadneedle Street did move first to raise rates, but once other central banks like the Federal Reserve followed suit, they did so faster and more aggressively than the Bank of England: a move which is now thought to have helped get America’s inflation rate down to almost half that of Britain’s. Indeed one of Hunt’s predecessors – and now boss – Rishi Sunak was well aware of the possibility that QE could trigger an inflation surge: long before Russia’s invasion, Chancellor Sunak was working to protect the U.K.’s finances from the prospect of even a small hike in the rate of inflation back in spring 2021.
Worth reading in full.
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One certain way to reduce heating costs is to reduce the volume of rooms, especially by eliminating unused space, for example by lowering ceilings.
I achieved a distinct improvement in comfort levels upstairs by boxing in a large void in my stairwell which had always been a pain to decorate, requiring scaffolding to access it.
The rising heat from downstairs is now directed to the landing and into adjacent rooms.
I am appalled at the trend – promoted by such as Kevin McCloud – for vast open plan, high-ceilinged living spaces
My house has roughly 8 foot high ceilings. At six feet tall, I can touch the ceiling when I stretch my arms. I wouldn’t want the ceilings any lower. In many cases, putting doors on staircases and blocking them in at the sides would help. It would be architecturally impossible where I live, though, so effectively the hall, stairs and landing is one giant room.
It is clearly not an issue with 8ft ceilings, but there are many pre-war houses that would benefit.
Why? What real problem will this solve?
It also leads to and increases mould in many cases. Especially in houses not made for modern insulation, like your average Victorian terraces, which are also completely unsuitable for heat pumps.
But as we learned with Covid, one cannot argue with cult members.
Indeed. Also, you have to be very careful what type of insulation is put in: if you have the wrong type and there’s a problem, it’s a case of ‘Do you want us to tear down your outer wall or inner wall?’
We actually had the guys out to do the insulation on our house a few years ago – they’d brought the kit with them and were ready to go – and they said it was impossible to do, because of the house’s design and the way our house extensions had been built 30-40 years ago. Some other people came out a few years later. The same thing happened. The guy in charge was walking back and forth on his mobile phone to his head office, saying ‘You mean there’s really no way we can do this?!’
I think that is true. The house I was born in was a Victorian terrace with just a coal fire. We didn’t open windows because of the cold but we had ventilation because of the air flow due to the fire. As it was “improved” with double glazing, gas fires and a supposed damp proof course the dampness got worse. Poor quality houses all sealed become damp, and we saw the consequences with the recent death of a young boy.
Jevons Paradox in a nutshell.
We need to drop all the Grade II, etc. listing rubbish. A lot of those houses have single glazed wooden frame windows which are very expensive to replace. Let those homeowners put proper uPVC double glazed windows in, maybe in future a solution which pleases the heritage bureaucrats can be found. Of course sealing up such a building may then create a damp problem but I wouldn’t be surprised if using a dehumidifier still led to a net decrease in energy usage.
The solution is to get rid of the climate change loonies and Net Zero so we can return to abundant, cheap energy.
Hands up those who remember one coal fire to heat the house and ice on the inside of bedroom windows in the winter
FYI here are some recent costs of running an air source heat pump.
I live in a pretty rented 2 bed cottage (2 generous rooms downstairs, bathroom, kitchen) that is probably 150 years old in East Yorkshire. The owner installed an air source heat pump 10+ years ago replacing oil (the village doesn’t have mains gas). They put in (correctly) overlarge radiators and some uPVC windows at the back and upstairs at the back and front leaving 2 huge sash single glazed windows at the front overlooking the village. It has a decent log burner which I light every night and is essential to get one room really warm!
Here is what my smart meter tells me were the electric costs over last 6 weeks running the house at 14 degrees during the day (I find the office warmer), hot water for one person (me) and a fridge, freezer and router 24/7. I use the washing machine and dishwasher if I need to during the night as I am on a variable rate. The heating isn’t on at night:
w/c 21st Nov: £21.19
w/c 28th Nov: £44.15
w/c 5th Dec: £64.58
w/c 12th Dec: £82.09
w/c 19th Dec: £22.17 (away – heat pump turned off from 22nd to 27th)
w/c 26th Dec: £40.65.
I have nothing to compare it with so I genuinely don’t know what other bills look like but I have to say the pump really struggled during the cold snap – 3 days it didn’t go above freezing – the pump is noisy and the radiators are never quite hot enough however much I turn up the thermostat.
I am building a new house and am not installing one.
Extra insulation must reduce heat loss and reduce the amount of heating required if all other factors remain the same, so if records show this doesn’t happen other factors must be changing. Trying to make houses airtight is an error without provision of ventilation. Human occupation causes considerable amounts of water vapour, so ventilation is required to deal with it. Many recently constructed commercial properties use heat recovery ventilation systems in conjuction with otherwise sealed buildings to provide at least minimum statutary ventilation levels based on intended occupation, but these usually use electricity to heat the incoming air when insufficient heat is recovered. I’m not sure how genuinely efficient these systems are, but there are claims by the manufacturers of them, which may be biased to show performance when incoming air temperatures are relatively high. It is obvious as with increased heat pump installations that when its cold they will demand grid electricity. In addition with the drive to more and more electric cars and the need to charge them more frequently in cold weather we are setting things up for electricity grid demand that even with massive investment will not be met. The whole crazy net zero agenda needs to be properly evaluated and realistic targets set which will mean continued use of fossil fuels which are the most efficient generators of energy. This should be coupled with proper data based science about the effects of Human introduced CO2 rather than the ridiculous data biased models deliberately using distorted data targeted to show future disaster which will not happen. To put things in perspective, currently CO2 is about 420 parts per million in our atmosphere which means our atmosphere is 0.042% CO2 and in historic times has been much higher. Without CO2 which is required for plant growth we would not survive and the increase in CO2 has improved crop yields which in some poorer countries has reduced starvation.
The Net Zero fanatics are at it again. The Telegraph reports today that the Conservative chairman of the Environmental Audit Committee wants the motorway speed limit cut to 64 mph to prevent climate change. A few years ago the Conservatives were campaigning to raise it to 80 mph. It’s a good job that in future that will not allow ordinary people to afford personal transport, so at least we won’t have the frustration of driving slowly along empty roads behind the great and the good in their £80K Teslas.
As with all things GREEN there is a smidgeon of the truth elevated into a planetary emergency for which no evidence exists. It is all pronouncements, statements of certainty where there is none and all spouted by technocrats trying to control the world and it’s resources with climate as the excuse, and then the compliant media filling the people’s heads with “crisis” and “emergency” to such an extent that some people are so thoroughly brainwashed that they glue themselves to buildings and lay down in the road clamouring for their own impoverishment.
To demonstrate the Government’s lack of joined up thinking (or more likely they don’t believe their own propaganda), in response to Chris’ observation “To make a substantial difference, all the doors and windows in often leaky U.K. houses need to be made airtight” it’s worth highlighting that from 15th June 2022 the majority of replacement windows and doors must be fitted with trickle vents! https://www.fensa.org.uk/building-regulations-homeowners