If Mervyn King and his team are trying to deal with Britain’s debt crisis by letting
inflation rip, I do wish they would just say so – rather than go through this monthly farce. Yet again, base rates have been left at an absurd 0.5 per cent, in an economy expected to grow by a full 2 percent this year but with inflation at 3.3 percent or 4.8 percent depending
on how you measure it. Petrol prices are bad, but now they are matched with soaring prices elsewhere – from train travel to groceries. Here’s a list of some price rises confronting shoppers:
Add Osborne’s VAT rise to non-food items and we will see CPI inflation soon at 4 percent, twice the Bank of England’s much ignored target.
Here’s what puzzles me. There is a theory in the City that King has decided to allow inflation to soar, judging that the greater risk to the economy is jacking up interest rates.
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