Tuesday, Jul 18, 2006

Inflation to 2.5%?

BBC News: Fuel costs push inflation to 2.5%

Rising energy bills continued to push drive UK inflation above government targets of 2% in June, the Office for National Statistics (ONS) has said. I wonder if the BoE care?..

Posted by kpjcomp @ 10:28 AM (2995 views)
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14 Comments

1. denzil said...

I will be surprised if rates don't rise in August.
In advance of August's MPC meeting the quarterly figures will be released which may paint a clearer picture but with Gordon now populating the MPC with his very own hand-picked members there is always a chance they will sit on their hands again.

Tuesday, July 18, 2006 10:47AM Report Comment
 

2. waitingfor hpc said...

Crash Godon will try and stop IR for as long as possible. No gains for him in letting the market self correct, which is what needs to happen.
In mnfr inflation year to date has been 20-25% on my raw materials! Which we are passing on as 10% to our customers which will hit the consumer, and has.
As for the MPC well it should be Gordon's MPC!

Tuesday, July 18, 2006 11:12AM Report Comment
 

3. inbreda said...

Like the guardian article said, 130,000 pounds per year to do absolutely nothing is not a bad job. It is becoming so obvious that Gordon is manipulating the committee, I don't know why they even bother to meet, other than the fact that it would look REALLY dodgy if they didn't.

Tuesday, July 18, 2006 11:57AM Report Comment
 

4. Retiredbanker said...

Any rate increase will probably be deferred until October in order to avoid this feeding into the September inflation
figure, upon which all Government social security benefits, public sector pensions, etc. are linked.

Tuesday, July 18, 2006 12:21PM Report Comment
 

5. Surfgatinho said...

I suppose there is a slim chance of an IR raise in August, but a) the MPC's view of long term inflation is low and b) apparently this is the highest rate since September 2005 so we have already had inflation this high, straight after they cut IRs and they didn't make a causal link after that...

Tuesday, July 18, 2006 01:41PM Report Comment
 

6. Ohhyesitwill said...

Record personal debts, high inflation, poor pensions returns, people surviving by MEW, unaffordable housing, high unemployment, worthless endowments, record bankcruptcy, and ALL the fault of this government.

Didn't we used to kick out governments like this rather than suck up the spin?

How about one of you IT people out there organising an on-line campaign website where FTB's register and agree to only offer 80% of asking prices. If they all did it, it would have to come back down. Phone the BBC, Guardian, etc, tell them about this site and your reasons for doing it (i.e. because the government don't care, because the MPC isn't working for housing, because the conflicting reports from the Halifax, Nationwide etc and others with vested interests.....go on, you'll be famous for triggering the crash)....

Tuesday, July 18, 2006 02:18PM Report Comment
 

7. Laksaboy said...

Sterling fell against the dollar yesterday but has rebounded a bit today after the inflation figures which may be a good sign for a rate increase. I wonder how much sterling would drop if Gordon's chums at the BOE did hold out against raising rates.

Tuesday, July 18, 2006 02:29PM Report Comment
 

8. markd said...

My understanding was that the MPC was duty bound to keep inflation at or below the 2% target. If there is no rise in the base rate in August we can only assume that that duty no longer applies which raises the question as to what purpose the MPC now fulfills.

Tuesday, July 18, 2006 02:46PM Report Comment
 

9. Flubber said...

Don't worry, folks the media will be reporting inflation down to 2.001% just before the next MPC meeting...phew!

Tuesday, July 18, 2006 02:53PM Report Comment
 

10. uncle tom said...

MPC remit is 2% as a central target, with a margin of 1% on either side, so anything between 1% and 3% is OK.

Tuesday, July 18, 2006 03:58PM Report Comment
 

11. markd said...

Thank you UT.

So once the present oil spike works it's way through the system we might well see the CPI pushed to a level where the MPC has to act.

Tuesday, July 18, 2006 04:11PM Report Comment
 

12. Time To Raise Petrol Prices said...

Markd - no, because they'd rather shuffle the contents of the CPI basket of goods than ever admit that inflation is surging. I used to be a staunch bear, but I'm beginning to wonder - maybe people really can go on MEWing and buying ever more expensive houses if the government bull$hits us on inflation and keeps rates low. At these levels, debt is still fairly manageable. People will look back to this period as a period of housing madness with the same feeling that they look back at 15% interest rates now. The country has amply demonstrated that it does not care how indebted it gets, as long as it can afford the repayments, and the government is scared stiff of raising rates to prove them wrong, so this could easily go on another few years.

Let rates stay low, inflation surge, and average house prices go to 400,000. Then when it finally does come down and rates go up (we have to have a recession eventually), and a major bank, like Natwest for example, goes under, the shock waves and repercussions will be stupendous. I think we knew that this boom and the corresponding crunch would be long and painful - we just underestimated quite how long and painful!

Tuesday, July 18, 2006 06:34PM Report Comment
 

13. Northern Lad said...

this is NO Government....just monkies! KICK 'EM OUT!!!!

Tuesday, July 18, 2006 08:40PM Report Comment
 

14. sebastian said...

It certianly seems like it could go that way Time To Raise Petrol Prices...Tis very depressing.

I plan to get my 3 - 4 years IT experience and then leave this country, unless we see a major correction. I'll probably leave anyway.

Wednesday, July 19, 2006 09:10AM Report Comment
 

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