As where all paying now roughly £2000 per £100,000 borrowed for lower inflation are we getting good value for money??? For £2000 I expect results and as consumers where not getting them, all what we can seem to expect is to get charged even more for the politicians and banking sector failings to control inflation and inept management.

BBC NEWS | Business | Inflation 'pushing up pay deals' Well done Mervyn, your increases to the cost of living via interest rate rises has merely created wage inflation. I'd quickly suggest putting up interest rates again as that will tackle the rising cost of living and stamp out this dammed inflation problem.

As I never started it's impossible for me to stop.

So you still can't give a answer??? The great depression of the 1930s interest rates didn't fix nor stop it. The inflation and oil economic pressures of the 1970's didn't get stopped or prevented by the great minds of the industrialised countries. You also mean the great minds who decided to gerrymander with the housing market to get votes in the 80's by not allowing councils to rebuild new housing stock when they had to sell to renters causing the present house price inflation. You also mean the great minds that spent billions trying beat the markets to prevent ERM expulsion and that put interest rates up from 10% to 15% in one day but then only put them back to 12% (note not 10%). I would suggest you get a history book and have a look at what the great minds of the industrialised economies have achieved you will see that it's just boom/bust boom/bust hardly a great sign that interest rates work or are even effective. If interest rates where the holy grail of economics you would not get such vicious cycles. Or perhaps I should just be like you and accept the status quo and never question just accept what the great minds are telling us and keep handing over my hard earned cash.

Once more still no answer to the question of why any increase in the cost of borrowing should go to banking sector bottom line (please note that I mean the entire banking system, money markets not just the high street banks) rather than paying off the debt. If I've borrowed too much money I should be paying it back not having a higher cost of borrowing, which lets face it is a pretty stupid state of affairs and achieves very little apart from improving city profits. Yes it costs the bank more, but are you really trying to say they don't take a cut of any increase??? It's a loaded question is it??? I'm afraid not it's a very simple question surely it can be answered if it's loaded or not, and I'm afraid that's the system. Do interest rates work, yes in the sense if you put them up high enough you kill the economy. Why not simply put interest rates up to 15% again that will sort out inflation. You have too much trust in the establishment, just because this has been written thousands of times that the way to control inflation is with interest rate raises doesn't mean it's the best way. Increasing taxes would reduce inflation as would a decrease in wages. You make a great point about people with loans etc... paying the price with wage cuts, but you fail to make the next logical step that is inflation is a micro economic problem and NOT A macro economic one. Why am I paying for the idiots down London who've driven up house prices??? What your really saying is that interest rates should be set regionally, but this brings you back to do interest rates work??? Also what about the people without loans driving inflation up as they have spare cash!!!! How do you fix that with interest rates??? Perhaps you can answer what possible association there is between oil price and interest rates???? The recent inflation pressure can be said to be caused by energy prices, the great the Mervyn the dim offered this as the excuse to the chancellor which was a clear admission that interest rates don't work. Yet I'm paying the price for something that's way out of national control. Again in your reply you've completely failed to say what possible there is to me as individual to paying more for borrowing money. Perhaps when thousands off families are homeless you'll be happy. I'm not making assumptions, inflation is a complex problem and can't be covered in a few sentences.

Why does it have holes in it???? What exactly am I getting for the extra £2000 I'm now having to give to the banks???? What difference would it make to simply have a £2000 wage reduction from my salary??? That would reduce costs, leading to lower prices therefore lowering inflation??? If you can say the above is a simplistic argument then so is using interest rates to control inflation. Inflation is being caused by the over supply of money which encourages higher prices leading to inflation. The root cause of this is the banks and they are rewarded with high interest rates encouraging them to further lend money. Granted at some point the cost of borrowing will be too prohibitive the main problem being many people have lent large sums against the promise of long term stability which the BoE is charged with and people are now facing the very real prospect of losing there home because of the stupid notion that interest rates control inflation. If my argument is so full of holes then you can answer the one very simply question: Why is it in the economic interest of the country for any increase in the cost of borrowing to go towards the banking sector bottom line, be it the banks themselves or the money markers rather than the increase coming off the debt owed by the individual??? Or do you deny that somebody somewhere is making huge sums of money out of these increases? It's a very simply question yet the Bank of England have failed to answer it so far. Everyone I've asked so far has failed to provide anything like a reasonable response. I presume you have economic modelling data which can verify and has been published that money is better going to the bottom line rather than off the debt.

BBC NEWS | Business | UK interest rates raised to 5.5% Yet more money taken from the poor to give to the rich, this stealth tax needs stopping. Why not simply order wage reductions across the board this would have exactly the same effect.

King sees money growth as danger sign-Business-Economics-TimesOnline Well done Mervyn, the banks are lending out too much money increasing inflationary pressures and quite rightly the consumer should pay, as giving them even more profit will teach them not to be so reckless. Lets tax the poorest even more and give the money to the rich. For £250,000 a year, your worth every penny Mervyn.

BBC NEWS | Business | Bank sees 'sharp' inflation drop Bank pledges better rate guidance

BBC NEWS | Business | Interest rates 'must hit 5.75%' Not that people are fighting for higher wages to meet the higher mortgage repayments then!!!!

See the end of the thread for latest views/news. Also see here; http://www.consumeractiongroup.co.uk/forum/showthread.php?288237-The-great-interest-rate-ripp-off-part-2 I have a simple question, why should any increase in the cost of borrowing go to the banking sector bottom line, rather than paying off the debt owed? Why is it in the economic interest of the country for the money to go to the banking system rather than reducing the level of personal debt? I am seeking help in mounting a legal challenge over the legality of using interest rates to control inflation, primarily my objection is that currently the consumer see’s no benefit in any increase in the cost of borrowing I argue this increased cost should be coming off the debt owed by the individual and not funding the bottom line of the banking sector. I want to challenge the Bank of England in court over the use of interest rates to control inflation, there is no justification in law, economically or morally to simply make borrowing more expensive to control inflation. Therefore the BoE is acting illegally by allowing the banking system to simply take our hard earned money cash to fund the bottom line £100,000 @ 3.5% APR = £3500 a year in interest July 10 2003 £100,000 @ 5.25% APR = £5250 a year in interest Jan 2007 So far over the past 4 years there has been an inflation busting 50% rise in the cost of borrowing under the guise of controlling inflation. If the interest rate goes to 5.75% as many economists expect this means an inflation busting 65% raise in the cost of borrowing. This would mean for every £100,000 owed approx £5750 will be taken in interest with none of this money going to the debt owed. The banking system is raking in an extra £1750 a year of our money for doing nothing. Surely if interest rates control inflation a 50% rise over 4 years would have controlled the problem, unless of course they don’t! Interest rates are only fuelling banking sector profits Interest rates don’t control inflation Increased repayments should go to reducing personal debt levels not banks profits Personal lending limits should be set Maximum mortgage multiples should be set Interest rates don’t combat raising oil prices, energy prices etc... Interest rates don’t combat inflation caused by tax raises If you start digging deeper you find that it’s the banking sector helping to fuel inflation by recklessly lending money. The current system does not penalise the banks for reckless lending, if they lend out too much money and cause inflation they are rewarded with higher interest rates which we pay for! It’s the consumer paying for poor banking decisions over lending. The only way banks can increase profits is by lending more money, this is a vicious circle and it’s the consumer who pays the price with inflation and higher borrowing costs. Inflation isn’t helped by the pressures of the stock market, energy prices, tax raises etc… yet our governor of the Bank of England remains silent, just blames the consumer and makes them pay. I’ve already contacted the Bank of England and so far they haven’t given me any economic evidence why it’s in the economic interest of the country for the increases in the cost of borrowing to go towards the bottom line rather than paying off debt. If anyone here can give me the economic argument for this I look forward to reading it. Please note I have tried to keep this simple and brief, inflation is a complex issue but it’s cannot be control simply by increasing the cost of borrowing and ensuring the consumer pays for it 100% which the current system does. However I know there isn’t one and I want my overpayments to the bank back AND TAKEN OFF WHAT I OWE ON MY MORTGAGE. http://petitions.pm.gov.uk/mortgages/ - Deadline to sign up by: 20 May 2007 There currently is a petition here please sign and protest, this petition has not been created by me but I’ve already signed it. If anyone can help please get in touch, no central bank has ever been taken to court, it's time they where and asked to justify what they are doing. If your fed up help spread the word and join the fight.