Issue #1 – 28 May 2026
Policy Spotlight
The UK government continues to run large budget deficits and is increasing public spending. Meanwhile, the Bank of England has gradually eased monetary policy by cutting the Bank Rate to 3.75%. However, the Monetary Policy Committee (MPC) has explicitly stated that monetary policy must remain restrictive to bring inflation sustainably back to the 2% target — especially amid new inflationary pressures from rising global energy and fuel costs linked to the conflict in the Middle East.
Sources (for your reference):
Bank of England MPC – April 2026 Monetary Policy Summary
Office for National Statistics – Public Sector Finances (April 2026)
Office for Budget Responsibility forecasts
The Austrian Lens
Austrian economics teaches us that the economy is not a machine to be “stimulated.” It is the outcome of millions of individual human actions. When governments spend money they don’t have (by borrowing or through money creation) and central banks keep interest rates artificially low for too long, they distort price signals and interest rates. This creates malinvestment — capital is directed into projects that only appear profitable because of cheap credit and inflated demand, but are not sustainable once reality returns.
Real-World Business Impact
• Your input costs (energy, materials, wages) keep rising faster than you can pass them on to customers.
• Borrowing to expand or maintain cash flow has become significantly more expensive.
• Customers are becoming more price-sensitive, squeezing your margins.
• Small and medium businesses bear the heaviest burden because they cannot easily hedge currency risk or lobby like large corporations.
Actionable Takeaway
Review your pricing immediately. Many owners are still operating on 2023–2024 margins. Raise prices where the market allows, even if it feels uncomfortable. The businesses that survive the next 12–24 months will be those that protect their cash flow and avoid taking on new debt at today’s elevated rates.
Free-Market Alternative
Let interest rates be set by savers and borrowers in a free market instead of central-bank manipulation. Stop deficit spending financed by money creation. Allow genuine price signals to guide capital to its most productive uses. Entrepreneurs would then make better long-term decisions without the artificial booms and busts created by government intervention.
What do you think?
Reply to this email and tell me how this policy is affecting your business or investments right now. I read every reply.
Stay free,
Jean-Pierre
The Austrian Actor
P.S. The full archive is always available at theaustrianactor.com