Inflation

Lord Hannan of Kingsclere Excerpts

Monday 23rd May 2022 Lords Chamber

[Baroness Penn (Con)]

I can absolutely assure the noble Lord and all noble Lords that I will convey the opinion of this House on this matter to the Chancellor.

[Lord Hannan of Kingsclere (Con)]

My Lords,

“Inflation is always and everywhere a monetary phenomenon”,


as Milton Friedman pointed out. We printed a lot of money during the lockdown without producing any real-world goods. If this was really about the war in Ukraine, how come Japan and Switzerland have inflation of less than 3%? Will my noble friend the Minister urge the Bank of England to reduce the ultimate cause of the problem, which is printing lots of money so that people could stay at home producing fewer things? We will not restore fiscal sanity without sound money.

[Baroness Penn (Con)]

I am afraid that I am going to have to disappoint my noble friend. We cherish the operational independence of the Bank of England, and that applies to QE as well as to interest rate-setting.