MSE News: Inflation unchanged but prices still soaring

kar999

"Scottish Power revealed last week it is increasing gas and electricity prices by up to 19%, with the other major power firms set to follow. "

I really think Martin ought to clarify/change that statememt, as it is only an average increase (even then I'd like to see their proof). The discussions in the Utilities threads show a huge number of people are facing increases from Scottish Power in the region of 30+% (myself included.)

Sceptic001

taxsaver wrote: »

How exactly do you propose that the BOE should act then? It only has one tool and raising interest rates is pointless as inflation is being driven by commodity prices and tax rises! Raising interest rates will only ADD to inflation.

The tool is only useful when inflation is being driven by excess demand caused by profligate consumerism which is surely NOT the case at present?

The BoE is indeed in a quandary of its own making. It is losing credibility, which is important in banking. Arguably a quarter point rise would make little practical difference (it would still leave the base rate below LIBOR), while perhaps helping to dispel widespread fears that it has abandoned its inflation target remit.

germanjulian

So although your savings might have grown, the impact of inflation means what you can buy with the money has fallen, meaning your cash loses value.

thats why the bank of England/government want high inflation... it erodes some of the debt mountain we OWN in pounds as most debt is not owed to foreign companies/states and owed inside the UK.

Inflation is a monetary policy!