The Reader: Cutting bank’s base rate won’t help the economy

It appears the Monetary Policy Committee is considering cutting the Bank of England’s base rate from its current low level of 0.75 per cent. It’s hard to see what savings might be discouraged by this or who might be encouraged to borrow extra.

Any economic effects must depend on reducing the exchange rate or on artificially boosting asset prices. If this policy does boost demand, which is by no means certain, will it not mean that when the inevitable asset price retrenchment takes place, the fall is from a greater height and hence will be more painful?
Douglas McWilliams​, Deputy chairman, Centre for Economics and Business Research

Editor's reply

Dear Douglas

Some at the Bank of England have been getting overly troubled by signs suggesting the economy is cooling, and are talking of cutting rates to 0.5 per cent. But this would be a mistake.

First, it would make little difference to the economy with rates so low anyway. Rather, it would send a crisis message about Britain to the world. Second, it is far too early to gauge the “Boris bounce”. Since his election, anecdotal evidence has it that the property market is on the up and businesses are doing deals again. A recovery could be round the corner; we just don’t know. The sooner we get back to interest rates that make saving and investing worthwhile, the better. The decision on January 30 will be Mark Carney’s last as Governor of the Bank. Let’s hope he and his committee get this one right.
Jim Armitage, City Editor

Gender pay gap damages us all​

Gender pay is coming to the forefront. What a number of these cases are showing is that females, who are essentially doing the same job as their male counterparts, are being paid less.

There may be reasons for pay difference, such as additional responsibilities or significant difference in skills and experience, but employers need solid evidence on actual performance to justify the difference, and they have to actively interrupt bias assumptions.

Equal pay has been a right since the Seventies but it remains an issue. We have seen an increase in the number of equal pay cases and employers should be aware that poor excuses only further damage their reputation.
Monica Atwal​, Managing partner at Clarkslegal LLP

I’d pay for MP to ring Brexit Big Ben​

I recently heard on the radio that, should Big Ben not ring for Brexit, MP Mark Francois may abseil down the tower, armed only with a hammer, to strike the bells himself.

It was probably fake news but, just in case, I wish to place on public record that I, for one, am prepared to pay considerably more than a bob to watch that happen. It seems just the tonic a badly divided country needs to start the healing process.
Chris Dunne

Labour process is undemocratic

As council leaders, we are appalled to see that the Labour Party’s National Executive Council has engaged in an undemocratic and unrepresentative selection process for the shortlist for the Lambeth and Southwark Labour Assembly seat.

We recognise that shortlisting from lots of candidates at short notice is difficult but for an unrepresentative panel, made up of trade unions and Momentum leadership, with no involvement of local members, to include people with no connection to either borough, while rejecting the applications of experienced BAME [black, Asian and minority ethnic] women councillors, is shocking.

Sadly, it is emblematic of how Labour has operated for the last few years: with contempt for local government, and decisions made behind closed doors to help those close to leadership, rather than being based on merit. Councillors, members and MPs are outraged by this decision and are clear that the process needs to be reopened.
Cllr Jack Hopkins, leader of Lambeth council and Cllr Peter John OBE, leader of Southwark council

Trump is distracting us with Davos​

Donald Trump showing up in Davos is a PR trick. His impeachment trial starts today, when Davos begins. It shows how eager he is to show his international reputation has not suffered — for suffered it has.
Iveta Cherneva, author, Trump, European Security and Turkey