They have to be joking

I nearly choked on my coffee when I read this story from Bloomberg:

Nov. 14 (Bloomberg) -- The Bank of England signaled there is room to cut its benchmark interest rate at least once next year to prevent an economic slowdown without boosting inflation.

What? An interest rate cut "without boosting inflation"? Did anyone at the BoE take take a look at yesterday's inflation data? The RPI is running at over 4 percent, and it has been at that level consistently since October 2006. September output prices are running at almost 4 percent, which is the highest level in 12 years. Even the near-fraudulent CPI measure is running above the 2 percent government target. What is more, it is on a strong upward trajectory. World commodity prices are rising and oil is approaching $100 a barrel. Inflation is already "boosted". It is too late, the proper conclusion here is we need at least two more interest rate hikes.

However, what is this talk about a non-inflationary interest rate cut? How does that work? Well, it might happen if the economy is suffering from mass unemployment. However, with rapid credit growth and robust consumer expenditure, economic growth remains rather strong. Although some sectors of the economy are slowing, this is mainly due to housing bubble related activity, and any reduction here is healthy and should be welcomed.

Clearly, there is a lot denial over at the BoE. The MPC have spent far too look staring at their core inflation charts and like true economists, they have assumed the problem of rapidly rising prices away. However, back down at the supermarket or at the petrol station, price increases seem decidedly "core". In fact, these increases are really beginning to hurt.