Interest rates are simply prices for borrowing. As with all prices, they should be determined by supply and demand in a free market. When they are fixed by a wise man, or by a wise committee, they no longer carry information about the preferences of consumers and the scarcity of resources. On the contrary, no matter how wise the dictator, interest rates set by diktat are sure to be a kind of misinformation, leading those who act on them into error.
It's time to remove the power of the BoE of its power to set interest rates. As Jamie says:
The Bank of England should not get tougher or try harder. It should give up.
And he can prove it, too.
If you haven't read Bad Thoughts by Jamie Whyte, I urge you to spend the 7 quid now and you can thank me later. The more people who read this book and learn to think, the better the world will be.
Tip of the clown wig to Samizdata.