Item — HN Reader

"Soros did not hurt UK economy. Just bruised some egos at the Bank of England by showing their stupid mistakes."

From the article:

"At 11AM, the British government announced they would increase interest rates 200 basis points, from 10% to 12%. ... [later that day] an interest rate increase of another 300 basis points, from 12% to 15%."

That means millions of ordinary people suddenly, not even overnight but on the same day, found themselves paying 5% more on large loans such as mortgages. To make completely clear, that had a very significant negative impact on a very large number of ordinary people.

Also from the article:

"The cost to British taxpayers was estimated at roughly £3.3 billion."

That's an average of over £128 per tax payer (3,300,000,000 / 25,700,000 tax payers in 1991-92 according to [0]). Again, to clarify, tax payers are not some "egos at the Bank of England", but ordinary people like me and you.

Or to summarise in simpler terms, a small number of the very rich got significantly richer by making a large number of ordinary people significantly poorer.

EDIT: Corrected figures. Thanks @philipkglass for spotting.

[0] https://assets.publishing.service.gov.uk/government/uploads/...

3 comments

"The cost to British taxpayers was estimated at roughly £3.3 billion."

That's an average of over £100,000 per tax payer. Again, to clarify, tax payers are not some "egos at the Bank of England", but ordinary people like me and you.

There were only 33,000 tax payers in the UK in 1992?

I don't know how many tax payers there were, but dividing by the population at the time comes out to £58 per person.

Good spot. I must have been either using the British definition of billion (million million) rather than the US definition (thousand million), or failed to spot that the 25,700 taxpayers in the referenced document actually represented 25,700,000. Anyway figure corrected. Thanks.

Billion has meant 10^9 in both the US and the UK in most common usage since the 1970s. https://en.wikipedia.org/wiki/Long_and_short_scales#cite_not...

There is no modern British definition that is different from the US definition.

One consequence of the historic distinction I quite like is that traders in the UK (and possibly elsewhere, I don't know) still call 10^9 a "yard" (short for "milliards").

You speak only of mortgages, but very many British subjects would have had deposits as well and would have gained through the interest rate hike.

> over £128 per tax payer

> making a large number of ordinary people significantly poorer.

You contradict yourself a lot