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February 15, 2011

Comments

Martin Marprelate- A Man in the Street!

And the amusing point about this is that the Government and its satraps in the Bank of England cannot, indeed dare not, do anything about this as a rise in the Bank Rate would kill stone dead any chance of Economic Recovery that may just be starting to occur.

We are indeed living in "Interesting Times" .

Phil East

This is worrying indeed. The bank needs to act and push put interest rates a bit, unemployment may rise a little but not enough to offset the cost of not acting now.

Martin Marprelate- A Man in the Street!

Unlike Phil East I do NOT consider a rise in umemployment to be a price worth paying to keep inflation down. I am old enough to remember when a Chancellor of any Party would have got down on his knees to thank God for an Inflation percenatge as low as 4%. I can certainly recall double digit inflation being the norm.

Matthew Reynolds

The Bank of England must have to set the price of money so that two years hence RPI-X is 2.5% & CPI is 2%.Inflation and excess regulation of small & medium sized businesses are the next two economic demons to slay.If we drive down the cost of red tape by having less of and allowing smaller enterprises to cease complying with much of it then you could boost private sector job growth without fuelling inflation as extra employment would be generated via higher productivity not a boost to the money-supply.Inflation harms those on fixed incomes and low wages as well as driving up the bills for the suffering middle classes.Higher interest rates will boost the savings ratio which should help pensioners with very small savings incomes.More loanable funds for business caused by economic rebalancing(i.e. less debt fuelled consumption and more saving owing to higher interest rates) means extra cash to invest.Business needs extra credit for investment and might well expand more if not facing excess regulatory burdens.

So the MPC needs a new targeting regime to curb excess price spikes as they can distort investment decisions by making planning harder owing to uncertainty and instability.Couple that with a mass purge of excess business regulation and we could have falling unemployment,lower inflation and faster growth in GDP.

We are dealing with the PSBR and now have to go for light-touch regulation of small & medium sized firms as well as a tougher monetary policy.

David

So then, with further evidence of the country’s dire economic state, how the hell can we afford £17B on HS2 nonsense for which there is no business case?! We'd be better using some of this money bringing the country's existing but crumbling infrastructure - such as our pot-holed roads - up to continental standards. The workforce will be more likely to cope with the challenges of the task too!

No doubt the totally unjustified rise in petrol tax and VAT have now fed through the system and so contributed to this Inflation figure. Instead of raising taxes, the Government needs to cut its expenditure by further lopping of the average of the currently proposed domestic cuts off the UK's EU budget contributions - unilaterally if necessary.

In fact, if business and local Government need to pass Audit in order to be able to continue to trade, why are we making any EU contribution when the EU accounts haven't passed Audit not just for one or two years, but for SIXTEEN years. Or should we just cut government and business expenditure by abolishing audit altogether – that would after all make us more in tune with the practical effect of the EU style of governance.

Until these issues are properly dealt with, all MP's – including the Labour MPs for being so useless in opposition - are collectively mismanaging the UK economy.

Veteran

I am against the HS2 project, as I think it's unnecessary and will become a white elephant. However, hunkering down even further is not the answer. Spending money on infrastructure projects adds to growth and does not impinge on inflation.

It doesn't add up...

Inflation is 5.1% - at least on the measure that everyone accepted since 1948 until Gordon Brown tried to make us look the other way. What's worse is that it is accelerating - and it could be controlled. The risk is that it continues to accelerate until it becomes the dominant economic problem - verging on hyperinflation.

Andrew Smith

This is not an accident or a surprise. It is the plan.

There are only so many ways of dealing with a banking crisis and excessive HMG borrowing and inflation is the most tried and proven one. Inflation is not a surprise to anyone with first year O'Level economics (not that I did it - I started economics at University, and recon I was up to speed with the students who has A'levels within a term).

Commentator

Mervyn King is simply doing the Coalition's work. Debauch the currency, let inflation grow unchecked to devalue public and private debt, asset-strip savers and pensioners, tax the middle classes, remove their access to the welfare state and make minimal reductions to Labour's failed client state "to show that we have changed".

eugene

It is time for the real economy to be adapted to...all these low interest rates are not working- borrowers are not borrowing, savers are not saving- all because it is manipulated false economy. End QE, raise interest rates, show the real picture, stop pretending..and then we will be OK...people only invest in the real...not a house of cards.

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