MSE News: 20-year high inflation fuels rate rise pressure

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  • manchesterred
    manchesterred Posts: 495 Forumite
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    StevieJ wrote: »
    As long as they don't bow to it and make decisions based on the health of the economy not on what the Daily Mail says.

    Just in the name of even handedness :)

    http://www.morningstaronline.co.uk/index.php/news/content/view/full/102564
  • oldvicar
    oldvicar Posts: 1,088 Forumite
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    The 'good news' headlines could of course read:

    "Billions wiped off UK debt in real terms"

    "Millions of Britons to find it easier to repay their debts"

    "House prices set to rise again"

    All thanks to super soaraway inflation.

    No wonder that the Chancellor seems content to turn a blind eye to the Governor's failure to keep inflation under control - he probably tipped him the wink.
  • jimjames
    jimjames Posts: 17,624 Forumite
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    Just read this article that suggests UK inflation is now higher than in Zimbabwe!

    http://blogs.telegraph.co.uk/news/danielhannan/100080317/uk-inflation-rate-is-now-higher-than-zimbabwes/
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Kohoutek
    Kohoutek Posts: 2,861 Forumite
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    oldvicar wrote: »
    No wonder that the Chancellor seems content to turn a blind eye to the Governor's failure to keep inflation under control

    Why do you think that higher interest rates will make food, cotton and oil cheaper?
  • oldvicar
    oldvicar Posts: 1,088 Forumite
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    Kohoutek wrote: »
    Why do you think that higher interest rates will make food, cotton and oil cheaper?


    I didn't mention interest rates, nor the price of particular commodities that may or may not be included in the inflation rate. But YES, higher interest rates would lead to a strengthening of the pound and these things getting cheaper in sterling terms. I am not saying whether this would be a good or bad thing though.

    What I did comment on was just the BoE's failure to (even try to) achieve the target set for them and some of the (politically beneficial) effects of high inflation. In my view BoE and Government both expect and are happy for inflation to be higher than stated targets, but it works to borrowers' (including Government's) advantage not to admit it else the cost of borrowing would be much higher. To some extent the market knows this, the cost of borrowing having much less correlation to the official Base Rate than has hitherto been the case.
  • dunstonh
    dunstonh Posts: 116,384 Forumite
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    Just to give more balance...

    Economists tell MPs we may have deflation next year

    http://www.moneymarketing.co.uk/news/budget-2011/budget-2011-economists-tell-mps-we-may-have-deflation-next-year/1028409.article


    We have to remember that the current inflation figure is artificially higher due to the VAT rise. Strip that out and the figure is more reasonable.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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