Monday, Sep 04, 2006

Inflation at risk of spiralling out of control...

Daily Telegraph: Central banks risk letting inflation genie out of bottle

Interest rates are surely set to rise again. The favoured month in the markets is November, at the time of the Bank's next Quarterly Inflation Report. But I would not rule out the possibility of another hike this week, with rates up to 5.25pc by end-year.

Meanwhile in the eurozone there is also concern about inflationary pressures and rapid money supply increases. The ECB has upgraded its forecasts for both GDP growth and inflation rates.

Even in the US, where there was a pause in rate increases at the August FOMC meeting, it would be unwise to rule out another rate hike.

Posted by little professor @ 08:05 PM (551 views)
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4 Comments

1. Redwing said...

And Ruth Lea is to the right of Ghengis Khan. This is about the first time ever that I've ever read anything or heard anything from her that I've agreed with.

Signed, an old leftie.

Monday, September 4, 2006 11:55PM Report Comment
 

2. Sam. said...

lol, sorry redwing. an apt quote although applied a lot more to all the VIs it surely has it's place here;

“If a man is offered a fact which goes against his instincts, he will scrutinize it closely, and unless the evidence is overwhelming, he will refuse to believe it. If, on the other hand, he is offered something which affords a reason for acting in accordance to his instincts, he will accept it even on the slightest evidence.” — Bertrand Russell,

Tuesday, September 5, 2006 10:15AM Report Comment
 

3. miniftse said...

Personally I think Ruth Lea is wrong in her assumption that central banks the banks will tackle inflation, the central banks first priority is not their reputation but themselves, people don't get into these positions without putting themselves first and foremost. So they answer first and foremost to the government of the day, it is Brown that picks em here in the UK, it will be brown that puts them forward for their knighthoods. Recession or inflation, bet your life they'll pick inflation - they already have!

Tuesday, September 5, 2006 10:57AM Report Comment
 

4. Mrmickey said...

The real job of the central bank is to control the fear of inflation not to control inflation itself at the end of the day their the ones creating the inflation in the first place by holding interest rates artificially low for so long. They really fear deflation so you can bet your life they'll keep the money flowing at all costs until the currency is inflated away to dust. They'll always talk tough on fighting inflation to the public but behind our backs they'll keep the printing presses running white hot.

Tuesday, September 5, 2006 12:25PM Report Comment
 

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