Friday, June 13, 2008
Mervyn has his pen and paper at the ready
New Star Asset Management's chief economist, Simon Ward, has predicted that the Consumer Price Index (CPI) for May could breach 3% when figures are released next week, forcing the governor of the Bank of England, Mervyn King, to write a letter to the Chancellor. Commenting before the latest consumer price index (CPI) report is published on Tuesday, Ward said although CPI of 3.1% was not a done deal, he would be 'surprised' if upward pressure from food, fuel and import cost rises did not take the figure to such a level. He said: 'Governor Mervyn King will already know whether the annual increase reached the 3.1% letter-writing level. Recent news suggests it did, which may explain the lack of any discussion of monetary policy in Mr King's speech to the British Bankers Association this week.'