The mortgage crisis will have severe political consequences for the Tories

One of the benefits of the Bank of England being operationally independent is that it allows the governor and his colleagues to deliver the kind of message that the politicians find too awkward to verbalise. Indeed, only a couple of days ago, in his Mansion House speech, Mr Bailey also insisted that inflation would “fall markedly” for the rest of the year. The Bank hasn’t yet revised its central forecast for inflation to fall to 2 per cent by late 2024, and nor has Mr Bailey – a more political animal than he likes to appear – chosen to cast any doubt on the prime minister’s “priority” to cut inflation in half to about 5 per cent by the turn of the year. Given the long and variable lags in the way that interest rate hikes affect the real economy, the question that inevitably implants itself in the minds of the public – and of professional critics such as Professor David Blanchflower – is why the Bank is apparently so keen to hammer households and induce a recession, if inflation really is set on such a downward trajectory. Indeed, so staunch is their apparent commitment that Jeremy Hunt recently hinted that significant tax cuts next spring are unlikely: “Bringing down inflation puts more money into people’s pockets than any tax cut.” Such resolution is also displayed in Rishi Sunak’s reluctance to back the recommendations of the independent pay review bodies that cover public-sector staff such as teachers, doctors, nurses, the police and the armed forces.