Britains inflation pain at highest since 1992

ILW

Historically, it does appear that economies are more likely to be destroyed by runaway inflation than slow growth. Just appears that currently, growth seems to be the only thing anyone is interested in.

heathcote123

geneer wrote: »

Yep. You called it.
The bulls saw the obvious bubble coming, predicted the massive crash, preempted the global meltdown, banked on emergency base rates, and saw the rampant inflation.
Nailed it.



Of course the bears never once predicted that "free money" would be inflationary right? :rotfl:

erm told you that if the houseing market fell, the govt would drop interest rates to support the market, with resultant inflation & low ir bailing out the indebted.

I seem to remeber being told by your ilk that 'the govt couldn't do anything about it, the BOE were independant and would raise rates to 8%' etc etc & the bears would get to buy cheap houses...

I know who I think was right...

Heyman_2

Graham_Devon wrote: »

So, all this nonsense of "we can't target this inflation" and "it's the wrong type of inflation and we cant do anything about it" is rebuted by Mervyn King himself, who states himself, inflation could have been nearer target if the bank had "wanted to".

Hmmmmmm, let's look at the bit you haven't quoted to find out why he and the 8 other members of the MPC didn't do that -

As he said in the Inflation Report press conference last week: "We could, I suppose, have had a much tighter monetary policy, to have raised interest rates significantly over the past two years.
"That might have meant that headline inflation was indeed closer to the target, but it would have been as a result of falls in money, higher unemployment, and undoubtedly a steep downturn in activity.
"And I don't think that that is either consistent with our remit, nor would it be remotely sensible."

MFW_10Yrs_3

Heyman wrote: »

Hmmmmmm, let's look at the bit you haven't quoted to find out why he and the 8 other members of the MPC didn't do that -

I think you are missing the point. Graham WANTS falls in money, higher unemployment, and undoubtedly a steep downturn in activity.

Or at least it seems so with his constant demands for higher interest rates.

Heyman_2

MFW_10Yrs wrote: »

I think you are missing the point. Graham WANTS falls in money, higher unemployment, and undoubtedly a steep downturn in activity.

Or at least it seems so with his constant demands for higher interest rates.

To be fair, I don't think that's right - and I don't think anyone really wants those things. I think I'd be right in saying that some posters here, possibly Graham included, see these things as unfortunate but necessary bi-products of a long-term plan to repair the economy properly.

Personally I think such a policy has a high risk of huge long-term damage to our economy and country.

Luckily, it would appear that all 9 members of the MPC agree with that.

Graham_Devon

MFW_10Yrs wrote: »

I think you are missing the point. Graham WANTS falls in money, higher unemployment, and undoubtedly a steep downturn in activity.

Or at least it seems so with his constant demands for higher interest rates.

All I want is stability and to sort the underlying problems out for once and for all, instead of continually kicking the can. I.e. recognition of the dire situation we are in. I've never "demanded" higher rates. All I have done is stated over and over that we would have higher inflation thanks to low rates and that would be damaging to the country.

Why sit there making things up to suit?

geneer

heathcote123 wrote: »

erm told you that if the houseing market fell, the govt would drop interest rates to support the market, with resultant inflation & low ir bailing out the indebted.

I seem to remeber being told by your ilk that 'the govt couldn't do anything about it, the BOE were independant and would raise rates to 8%' etc etc & the bears would get to buy cheap houses...

I know who I think was right...

No you didn't. Revisionist history.

What the "bulls" did in fact say was "Crash? The guvvment woodnt let it appin".

Of course the governement completely failed to stop it.

The bulls find themselves in the spurious position of trying to claim intellectual credit for emergency base rates in the wake of the global financial crisis they completely failed to see coming. :rotfl:

Oh, and the low morgage rates end up being pretty sweet for those who bought well after peak rather than just before.

Joe_Bloggs

Someone said in April 2010:-

"We have absolutely no plans to raise VAT. Our first budget is all about recognising we need to get spending under control rather than putting up tax."

Without the VAT rise Inflation would be very close to target. The Vat rise will drop out of calculations from Jan 1st. Hence inflation will fall by the net effect of the VAT rise from then.
J_B.