According to reports inflation as measured by the CPI has hit 3.1%, the highest it has been since the measure was introduced in 1997. RPI, the former measure has hit 4.8% (a rise from 4.6% last month).
Firstly this means that the Governor of the Bank of England will have to write a letter to Gordon Brown explaining why the 3% mark has been breached. It got close back in January when inflation hit 3%, but eased back reducing fears of an interest rate hike. It is clear now however that there does need to be a rise in interest rates, and arguably that there should have been one last month.
The last time inflation peaked in January I wrote this article, pointing out that inflation as measured by RPI was the highest it has been since 1991. It is not 0.4% higher and so is the highest it has been for at least 16 years. As soon as I get hold of the Office of National Statistics Website I will check, but it is obviously being flooded right now.
So much for Gordon Brown's economic miracle. Inflation now higher than when Norman Lamont was Chancellor!
Update 11:00
The Office of national Statistics report is here, and inflation as measured by RPI is now the highest it has been since July 1991, almost 16 years ago. (See here)
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4 comments:
Why this comes as any surprise baffles me. Anyone with a pound in their pocket knows it's going less far than it did a year ago. If anything the RPI masks the true extent of the problem. The house price boom clouds everything, but it's all about to go very, very horribly wrong for Gordo.
Agreed. The knives are truly out, and deservedly so!
Most egregious, though not entirely straightforward, is the pensions fiasco. As well as the tax issue is the fact that the "prudent" policy of not borrowing has depressed long term interest rates, halving the annuity payments which can be expected by retirees. (Norway, which has a massive government surplus and doesn't need a bond market at all, still issues debt and invests the proceeds precisely to maintain an orderly market in interest rates.)
At least those of us who have been listening to Brown described as an Excellent Chancellor with incredulity for years no longer feel cranky!
Sooner we're rid of them the better.
Richard, agreed. Doubly so on house prices.
Elliot, Good points. I have never been fooled!
And yes Richard the sooner they are gone the better. The reason whay I joined the Conservative party is because I could not afford another Labour government and when we lost felt I had to pitch in.
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