Inflation dips but remains above target

Mervyn King must be getting used to writing letters explaining why his predictions were wrong. The BoE underestimates inflation about 90% of the time, they are absolutely rubbish at it.

I am not sure that anyone takes Mervyn King and his forecasts seriously as they are invariably wrong and this casts doubts on his competence.

Why do we have a 2% inflation target? Any level of inflation is bad and the target should be for zero inflation and complete price stability.

The real point is that Mervn King had little control over inflation, other than rob savers of the interest on their savings by keeping interest rates artificially low benefiting the feckless and the banks, and of course the government, not having to pay full rate for their borrowings, gilts and savings accounts (PO &NS & I) and premium bonds.

The persons responsible Brown/Balls cleaned up on their severance pay and expenses, and one, although re-elected has yet to appear at his place of work. How? Well printing money not backed by assets to pay for the bills they ran up with no money in the kitty.

The important figure is 4.8%.The CPI is irrelevant, it’s a bogus concoction, the only purpose of which is to deceive those foolish enough not to understand it.

Most economist and pundits including BOE continue to say that deflation is bigger threat than inflation because of amongst other things and "output gap". Some reports today even indicate that BOE is "surprised" that inflation remains so persistent. One does not need fancy survey to know that prices have been rising "fairly consistently" since late 2007, first driven by commodity and oil price surge, then weaker £ and now once again higher food prices. Then, public transport costs continue to rise at rates well above inflation. Ok ..mortgage costs are down but rents don't seem to be declining much. Why then, is BOE surprised that inflation is high.

I agree that large scale deleveraging brings the threat of deflation but commodity and food price driven inflation appears to be a bigger factor at least now. So, one has to ask ..should BOE be hiking interest rates ..if nothing else to protect savers or keep is low to help banks and prevent any threat of deflation, not to mention keep the cost of govt borrowing low. Low interest rates are not really helping the overall economy as spreads are wide and lending seems to have just dried up, especially for small businesses.

BOE seems to have no power. It is interesting to BOE apprears to air its frustration with banks...if BOE can't control inflation and influence banks ...who can??

1) ..the banks are making a massive profits taking us for a ride borrowing low charging high and paying naff all in intrest to the deposit holders.

2) ..the goverment are putting vat and other charges up.. so raising inflation

not to mention fuel that as a matter of course effects delivery costs..and the price of goods leaving the warehouses.

3)..they then ask the bank of england to write a letter explaining why inflation is high.

are they really that stupid then....these educated people..