Monetary Policy as Usual? The Bank of England’s Extraordinary Monetary Policies and the Disciplining of Labour

ABSTRACT

The global financial crisis triggered a revolution in the central banking world. The development of ‘extraordinary’ monetary policies has been a central feature of the crisis response across the US, UK and Europe and has been portrayed as the most significant policy shift since the crisis. In contrast, we present the case that extraordinary monetary policies are characterised by an intensification of rather than a departure from previous monetary strategies. By foregrounding labour in our analysis, we show how the extraordinary monetary policy of the Bank of England is an intensification of a long-standing strategy to discipline labour through wage restraint and increased personal and household indebtedness. The result is that labour must navigate its conflicting roles a worker, consumer, and debtor. We argue that this strategy is now reaching its limits as the rising cost of household debt is driving up the effective minimum price of labour while the focus on inflation targeting seeks to suppress wage demands. The result is to destabilise the conditions necessary for the continuous renewal of British-based capitalist accumulation.

KEYWORDS:

• Monetary policy
• debt
• austerity
• Bank of England
• labour markets
• productivity

Acknowledgements

The authors would like to thank Jason Heyes, Craig Berry and Sara Van Goozen for their comments on earlier versions of this paper. Any errors are entirely our own.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

John Evemy

John Evemy is a Research Fellow in Politics at the University of York. His research focusses on British monetary policy and the changing role of the Bank of England.

Edward Yates

Edward Yates is a Lecturer in Employment Relations in the School of Management at the University of Sheffield. Edward is a member of the Centre for Decent Work (CDW) located within the Management School.

Andrew Eggleston

Andrew Eggleston is a PhD candidate in Politics at the University of Manchester. His doctoral work focusses on the development of British housing policy under the 2010–2015 coalition government