Monday, 18 May 2009

The Bank of England and Deflation

"The Bank of England has stopped warning of deflation because it is no longer credible to do so. In truth, it never was. CPI inflation remains at 2.9pc – way above the Bank's target, as it has been for 31 of the last 33 months. As sterling has fallen, import prices have surged. In an open economy like the UK, that's highly inflationary."

Liam Halligan, Sunday Telegraph

1 comment:

Anonymous said...

Liam has been one of the few consistently spot-on voices out there: he gets it right most times. You just have to go to the supermarket, and follow around some pensioners (I know it is rude to do) but watch the expression on their faces as they see how much a very small piece of steak costs, or a miniscule slab of Icelandic cod. Its priceless and it doesn't say 'deflation.'