Islam's Response to Contemporary Issues — Page 179
Economic Peace 179 precariously high with the sole declared purpose to curb private consumption and thus suppress inflation. The economy is already squeaking and groaning under the stresses this policy has caused. Many a lesson can be drawn from this study. Among other things, this study presents a fit case of highly potent economic decisions being taken on the basis of a theory, which in itself is debatable. The notion that the higher the interest rate is raised the more will inflation be reduced seems to be the only reason to justify the maintenance of interest rates at an unnatural high level for so long. In the case of our current study of what is happening in Great Britain, the rate of interest has never been the real culprit in the inflationary trend. There must have been mismanagement in many areas of the economy and an overall faulty economic policy, which resulted in the relative high inflation rate of the present time. The raising of interest rates has only served to distract the attention from the root causes to an easy scapegoat. This strategy may show a measure of success in combating inflation to begin with but it has already set in motion powerful factors, which would produce secondary effects. The country would be pushed to an unmanageable state of recession and unemployment would soar. It is impossible to believe that advice from leading economists, experienced financial planners, central bankers and other experts is not available to the think-tank of the Conservative government. There has to be some reason for this prolonged wilful delay in lowering the high rate of interest on the hollow plea that it is essential for the survival of the national economy to push down the inflationary trend with the leverage of high interest rates. Could it be possible that the timing of lower interest rates is not politically suitable to the present government? Perhaps if it is delayed until close to the next