Tuesday, May 08, 2007
Media urge "prudence" by MPC
Guardian: Stopping the shopping
Several questionable opinions in this article: "Will a rise make a difference?" "Besides, higher rates do not simply squeeze disposable income - they also boost wealth by raising interest on savings. The fear is that higher inflation is pushing up wages and that this will fuel further spending." and then some confused words of the housing bubble.
Posted by confused76 @ 12:56 PM (148 views) Add Comment
3 Comments
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1. confused76 said...
... it is fascinating how commentators are missing that the main driver of inflation is the free-cash dispenser built into any UK house... if you do not stop that inflation will be out of control for a long time
http://news.bbc.co.uk/1/hi/business/6529343.stm
2. harold said...
confused76, journalist don't like telling people what they don't want to hear - bad for sales, and all that...
3. paul said...
"largely because it is intellectually uneasy about accepting that house-price inflation can trigger more general inflation and, moreover, can be caused by banks behaving as the Bank of Ireland and Cheltenham and Gloucester have done. It is curiously un-streetwise."
This is what worries me about the MPC - they seem to be curiously unstreetwise when it comes to the wider impact of engineering runaway house price inflation. The gilded coccoon of port lunches and leather sofas appears to be clouding their judgements.
Maybe their incompetence has been hidden for the last 10 years?