IEA Senior Research Fellow Jamie Whyte has written for The Daily Express discussing the impact of recent inflation and interest rate rises, arguing that much of the damage could have been avoided if the government significantly reduced spending in the aftermath of the 2008 financial crisis.

Jamie wrote:

“The austerity policy concerned Government borrowing. The Government decided not to increase Government spending by borrowing the money to fund it…Government spending is merely deferred taxation. The interest payments are made from money supplied by taxpayers.

“Of course, the debt created by higher spending isn’t the direct cause of our current interest rate woes, but it does feed in. Now that interest rates can no longer be kept artificially low as they were between the 2008 crash and the end of the COVID-19 pandemic, taxpayers are being forced to stump up. With almost half of the £750bn of Government borrowing between 2010 and 2019 being printed by the Bank of England, mortgage holders are now being forced to bear the brunt of rapid interest rate increases to control the subsequent inflation.

“Government borrowing that funds current spending spreads the cost over the future generations of taxpayers who will pay to service the debt.”

Read Jamie’s full piece here.