governments and central bankers are no longer pulling in the
same direction. After uniting to propel their economies out
of recession, Policymakers are now risking working at odds
. That's already happened in the UK with disastrous consequences
. After the Bank of England was trying to stamp
down the hottest inflation in decades, mistresses government decided
to slash taxes. The result was turmoil in the
markets, A major intervention from the bank and a
U. Turn from trust. The reason for this
collision is each side has different incentives. When monetary
authorities look at soaring prices, they see inflation that
needs to be stamped out by driving the economy into
risk if need be. But politicians in charge of
budget see something different. They're looking at voters who
are squeezed by a cost of living expecting their governments
to help out. Which usually means spending more taxing
less. All of this points to a new era
of policy filled with risks. Here's Bloomberg Simon Kennedy
. The risk is of a vicious circle. Central
banks find themselves hiking interest rates more because governments are
spending or cutting taxes. Then those debt burdens that
are being increased by the governments become costlier for them
to finance because interest rates have gone up and so
this continues creating problems for households and companies throughout the 00:01:19.400 --> economy