And the Bank of England, whose mandate is to keep inflation at no more than 2%, are printing money - because otherwise inflation will be really really low ! But don't worry - it'll be back to 2% soon - Mervyn King says so.
Economist Shaun Richards :
I have looked back at the Bank of England’s past inflation forecasts for today to see how they compare with a level of CPI inflation of 5.2%.
November 2009 1.8%
February 2010 1%
May 2010 1.5%
August 2010 1.5%
February 2011 2%
These are estimates from the mid-range of its fan charts but as you can see any minor error in staring at the chart is dwarfed by the scale of the forecasting incompetence exhibited by the Bank of England. Apparently we are supposed to believe yet again that inflation will fall below target and only this month we required a further £75 billion of Quantitative Easing to stop a deflationary nightmare!
6 comments:
Isn't a forecast. It's a lie. State debt has to be got rid of. Inflation is the only way to do it, the State isn't going to starve itself
Say goodbye to your savings and pensions.
Mervyn King was one of the 364academic "economists" who signed a letter to the The Times, early in Mrs Thatcher's government, saying that her monetarist policies would fail to cure inflation, and would lead to economic disaster.
They were completely wrong.
Did Mervyn King and the others learn their lesson? Or have they simply now crawled back out of the Keynesian woodwork?
What Mr Richards doesn't say is how much of that rise in inflation is down to the BoE "printing money", and how much is not. If we didn't have QE, would we have lower inflation, or the same rate and a worse economy?
Another thing that is worth considering is that if the BoE printing money causes lots of inflation, shouldn't the same hold true for normal banks? I mean, if printing money causes inflation, and inflation is bad, then banks should be prevented from making loans, period.
What Rob said.
Remember that Mervyn King switched his pension fund into inflation-linked bonds a year two back.
He knew what he was doing, alright.
And it's what his masters wanted, as Rob points out.
Hello Laban, interested in taking up my bet?
To quote J K Galbraith, "The only function of economic forecasting is to make astrology look respectable".
Or J G Brown, "I saved the world."
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