Inflation will rise faster than expected

wotsthat

ILW wrote: »

A bit of a daft argument. If there are part that cannot be controlled, then you aim to tackle the parts you can influence to compensate. This brings the overall figure to where it should be. Businesses have to do it all the time.

I get a higher than expected gas bill so I might buy one less bottle of wine to compensate; so far so good.

Inflation in tuition fees is higher than the BoE target so you think they can target inflation in different sectors to bring the average down overall - and they should do this on a MoM basis.

No wonder you're not very happy with Merv - he's in charge at the BoE - he's not Paul Daniels!

Now that's magic!

worldtraveller

The_White_Horse wrote: »

The only thing without inflation is salaries - unless you're public sector whose freeze includes a pay rise each year.

Even the "freeze" is largely a myth! Many public sector workers paid over the £21,000 pa threshold have been able to get around it with the likes of changes to overtime, changes to staffing or hours, grade inflation, drift within their grade, bonuses or other payments.

Generali

StevieJ wrote: »

Predicted it I think in the famous words of Rumsfeld, that was a 'Known Known'

It's not Mr King's job to predict inflation.

ILW

Generali wrote: »

It's not Mr King's job to predict inflation.

Surely prediction (planning) is required if he is supposed to control it.

Generali

ILW wrote: »

Surely prediction (planning) is required if he is supposed to control it.

Planning and prediction are different things.

There are economists, statisticians and many more whose job it is to predict inflation. Mr King's job is to run the BoE and a sub-part of that is to Chair the MPC.

homelessskilledworker

lemonjelly wrote: »

It's confirmed - 2.7%, not 2.2% - breaking news on the beeb.
http://www.bbc.co.uk/news/business-20310102

There is going to be a lot of nervous mortgage holders, contrary to what some of the 24/7 posters on here have been saying inflation at it's correct level within the parameters of the BOE remit is at the moment a blip in the last five years, most of the time it has been outside.
But if it starts hitting 4% or even 5% again or even more, you can wave goodbye to QE for certain, and rising interest rates are back on the cards.

There will be no easy options second time around.

wotsthat

homelessskilledworker wrote: »

There is going to be a lot of nervous mortgage holders, contrary to what some of the 24/7 posters on here have been saying inflation at it's correct level within the parameters of the BOE remit is at the moment a blip in the last five years, most of the time it has been outside.
But if it starts hitting 4% or even 5% again or even more, you can wave goodbye to QE for certain, and rising interest rates are back on the cards.

The 'nervous mortgage holder' should be on a fix and just watch inflation wipe 4% from the value of their mortgage debt and monthly payments each year. Inflation is generally good news for the debtor.

People with no assets and cash savings are those that should be nervous.

ILW

Generali wrote: »

Planning and prediction are different things.

There are economists, statisticians and many more whose job it is to predict inflation. Mr King's job is to run the BoE and a sub-part of that is to Chair the MPC.

It is impossible to plan without making (or knowing where to access) fairly accurate predictions.

Merv repeating "Ooh I didn't expect that" every month or so does not inspire confidence.

Graham_Devon

Generali wrote: »

What should Mervyn King have done about rising tuition fees do you all think?

Accounted for them in the figures. These were known about ages ago. How can the BOE be so far out, seemingly all the time at the moment. Not that I had a go at the BOE anyway.

While I realise you are more of a deflationist, theres no point getting at anyone who goes against that stance and asking what should be done. This has been going on for years.

poppy10_2

wotsthat wrote: »

The 'nervous mortgage holder' should be on a fix and just watch inflation wipe 4% from the value of their mortgage debt and monthly payments each year. Inflation is generally good news for the debtor.

Only if wages are rising in line with inflation. As it is, wages are stagnant while the cost of living is going up, meaning people are getting squeezed - high inflation is doing nothing to help them, unlike previous inflationary periods