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ollie plimsolls

Mervyn Drafts Letter To Gordon

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Brilliant, absolutey brillaint. Sums it all up. Merv will see the Miracle Man on his bike soon. TB must be smiling wider than his usual Cheshire Cat style. :D

Excellent post--needs to be enshrined. :)

Email it to Merv at the BoE--he may use it almost word for word.

Edited by Realistbear

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another amusing one here from the Telegraph, today......

Business comment

By Alistair Osborne

(Filed: 10/08/2006)

This year's Christmas message - time for a squeeze

Rate rise threat as inflation climbs

Dear Gordon,

Season's greetings! Trust I find you and the family in fine fettle in Kirkcaldy, despite the icy blasts, which must be playing such havoc with the kilt-wearing fraternity north of the border.

I do hope you took my advice and bought your Christmas decorations in August from that Mohammed Fayed fellow at Harrods. Don't tell me I didn't warn you that prices would start shooting up once autumn arrived.

Now, I must apologise for intruding on the festive season, but we do seem to have a little problem back here in the City.

You'll remember you told me that, in my role as Bank of England governor, I had to write to you if inflation rose more than a percentage point above its 2pc target? Well, despite the best efforts of your friends at the Office for National Statistics, that's precisely what's happened.

I must say I had a funny feeling about this in the summer and, wearing my most owlish expression, dropped some heavy hints. But, sadly most of the City had retired to their vineyards in France by then and were either not paying attention or too inebriated to notice.

Even the record A level results failed to focus attention on the impact rising tuition fees would have on your Consumer Price Index. After all, it's been resistant to almost everything else, including rip-roaring house prices and council taxes.

The soaring oil price has been no help either, made worse by the annoying habit of your near-namesake, Lord Browne of BP, to keep spilling the stuff or shutting down his oil fields. That put some rocket fuel under the gas and electricity bills.

The bald truth is that it's been terribly hard to keep inflation down despite, for example, Stuart Rose's success in lowering skirt prices at M&S.

You'll remember I called the past period of economic growth the NICE (Non-Inflationary Consistently Expansionary) decade. I should have called it the Naughty but NICE one, since we've spent it building up debts, no doubt following your lead. Now we're having to keep up the payments and the goods from China aren't so cheap any more.

I don't like to sound bitter, but if I had got my way, I might not now be needing to write. I didn't want to cut rates to 4.5 per cent in August 2005, but if you recall I was out-voted by the external MPC members you appointed.

I got my way a year later, putting them back up again by a quarter point, which as you know wasn't the last rise.

Karl Otto Pohl - one of my counterparts over in Germany - once said to me: "Inflation is like toothpaste. Once it is out of the tube, it is hard to get it back in again." Judging by his prices, my dentist has long understood what he meant and now I do too. Much as I'd like to, I can't promise things are going to get any better in the new year, which brings me to my final point. Do you want me to write you a fresh letter each month that inflation stays above 3pc or can I just copy and paste this one?

Yours ever, Mervyn

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Anyone know when Gordon releases the official CPI data?

BoE website still has the old figures.


Current Inflation (CPI)
Next due: 15 Aug '06

ONS have up to June:


CPI annual inflation – the Government's target measure – rose to 2.5 per cent in June up from 2.2 per cent in May. It has not been higher since the start of the official series in 1997, and has only been equalled once before, in September 2005.
Edited by Realistbear

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