Dare to dream and make your ultimate trip a reality

Email registration

Free weekly email update

Great products and special offers for Spectator readers

Click here for great value reader offers and events

Click here for the latest Spectator Wine Offers

Inflation Targeting

Well, yes:

The Bank of England will "crucify" consumers unless the Treasury lets it abandon its inflation target, one of Britain's leading economic authorities has warned.

The Government must consider re-writing the Monetary Policy Committee's remit or leave the UK to face an unnecessarily deep and painful economic slump, according to Peter Spencer, chief economist of Ernst & Young Item Club.

The slump might in fact be necessary to stop the inflation though.....just a thought. But as Peter noted earlier, Martin Wolf thinks differently. Inflation is indeed the enemy that must be defeated, even at the cost of a slow down (or reversal) of economic growth in the short term.

Although I have to admit I have seen a suggestion from one wag (no, sorry, can't recall where) which makes great sense.

One of the things that has contributed to the current problems is the way in which the inflation target itself was changed. From RPI to CPI, thus neatly removing housing costs from the target that the Bank of England was aiming at: just as house prices were going through the roof.

So, why not change the inflation target back to RPI? As house prices are now falling we'll be bang on target.

Maybe.

Actions: Print this article   |   Email to a friend   |   Permalink   |   Comment

Post this entry to:   del.icio.us | Digg | Newsvine | NowPublic | Reddit

Advertisement

Spectator Business | Apollo Magazine

Corporate | Advertising | Privacy | Terms

Spectator, 22 Old Queen Street, London, SW1H 9HP

All Articles and Content Copyright ©2008 by The Spectator | All Rights Reserved