Tuesday, Nov 17, 2009

I used to hear more precise statements from septic peg on a Saturday night then these 'economists'

Telegraph: UK inflation rises for first time in eight months: economists react

The Bank of England has indicated that it will look through the near time spike up in inflation .... Further Quantitative Easing remains possible
Remember, after all, that headline inflation went above 5pc back in 2008, with no real “second round effects” on wages and inflation expectations ... In short, no need to panic
we can't control near term inflation' but what they can control is medium term inflation

Posted by matt_the_hat @ 11:51 AM (1093 views)
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5 Comments

1. matt_the_hat said...

I particularly like this one

"we can't control near term inflation' but what they can control is medium term inflation"

Bet they were saying that when they were taking about the medium term 2 years ago :-)

Tuesday, November 17, 2009 11:53AM Report Comment
 

2. Black Swan said...

I keep reading about the amount of "spare capacity" in the economy that will act as a buffer agsints sustained inflation. This is rubbish.

Firstly, we are now importing price rises from abroad due to currency devaluation - this has nothing to do with spare capacity.

Secondly, the idea that there is a surplus pool of people, able, willing and capable of doing every job is rubbish as well. Anyone who is currently trying to recruit new staff must have discovered that good people are still scarce. The job market has an increased amount of relatively unskilled labour in it that gives the impression of a genuine surplus, but it is not a productive surplus.

Since companies have slashed training budgets and graduate recruitment more agrresively than ever there will be an acute shortage of skilled labour in the short term. In addition, capital budgets have been slashed meaning that physical capacity will also be at a premium in the near term.

The government is still allowing the Indian IT companies to bring over thousands of skilled IT workers (I know, I work for one of them (which has just recorded it's highest ever qtr on qtr growth figures!)) which does not smack of there being "surplus capacity".

Tuesday, November 17, 2009 12:03PM Report Comment
 

3. paul said...

I am genuinely surprised the media still fall for the 'temporary inflationary spike vs permanent deflationary trough' story year after year. Maybe that's what's got us in this mess ...?

Naah. Can't be.

Tuesday, November 17, 2009 12:11PM Report Comment
 

4. mr g said...

Vicky Redwood of Capital Economics: "October’s UK consumer prices figures mark the start of an upward trend in headline inflation over the next few months, but underlying price pressures should remain weak."

Perhaps I'm missing the point but how can you have an upward trend in inflation (headline or otherwise), if underlying price pressures remain weak?

Tuesday, November 17, 2009 07:42PM Report Comment
 

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