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Inflation Report set to show sharp fall in inflation!

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    Inflation Report set to show sharp fall in inflation!

    The Office for National Statistics is expected to say on Tuesday the annual rate of inflation fell to 3.6pc in January, from 4.2pc in December, providing some relief for consumers.

    The January 2011 VAT rise will have fallen out of the annual comparisons for the first time, and favourable utility price comparisons are also expected to lower the Consumer Prices Index. (AtW's comment: this means 3.6% inflation in current month without effect of 2.5% VAT is MORE than one would expect FFS!)

    Despite the fall, the Bank’s Governor, Sir Mervyn King, will be required to write his thirteenth letter to the Chancellor, to explain why inflation is more than one percentage point away from the 2pc target. (AtW's question: how many more letters would it take to get him FIRED?)

    “However, on our forecasts showing a continued decline in inflation over the next few months, he may at last be able to put his pen away soon,” said Philip Shaw, economist at Investec.

    The Bank is expected to say that with monetary policy as it currently is, inflation is likely to be below target on a two-year to three-year horizon, when it publishes its latest forecasts in the quarterly Inflation Report on Wednesday.

    That would pave the way for more quantitative easing (QE) in the coming months, after the Bank’s Monetary Policy Committee voted for £50bn more of asset purchases at its monthly policy meeting last week, taking the total QE spend to £325bn.

    The Bank justified its decision against the backdrop of a weak economy, and said that without more stimulus, inflation was more likely than not to undershoot the 2pc target over the medium term.

    “We continue to expect a series of further instalments of QE, paced alongside evidence of lower inflation, with the total ultimately reaching about £600bn, perhaps around the end of this year or in 2013,” said Michael Saunders, economist at Citigroup.

    Source: Inflation Report set to show sharp fall in inflation - Telegraph

    ---

    Oh FFS, how can they write with straight face that "without more stimulus, inflation was more likely than not to undershoot the 2pc target over the medium term."

    #2
    I am sure poor people struggling with food/power inflation of 10% and static income will be grateful. Ditto for those who have retired or with savings.

    Comment


      #3
      Originally posted by AtW View Post
      The Office for National Statistics is expected to say on Tuesday the annual rate of inflation fell to 3.6pc in January, from 4.2pc in December, providing some relief for consumers.
      Seems like you were wrong then.
      "A life, Jimmy, you know what that is? It’s the s*** that happens while you’re waiting for moments that never come." -- Lester Freamon

      Comment


        #4
        Originally posted by Freamon View Post
        Seems like you were wrong then.
        Wrong about what?

        Last year they had excuse of 2.5% increase in VAT (though lots of food is meant to be excluded from it), now inflation a wee bit lower (thanks to desperate retail stores discounting) but given that there is no more VAT increase to factor in it is still very high.

        Comment


          #5
          Originally posted by AtW View Post
          Wrong about what?

          Last year they had excuse of 2.5% increase in VAT (though lots of food is meant to be excluded from it), now inflation a wee bit lower (thanks to desperate retail stores discounting) but given that there is no more VAT increase to factor in it is still very high.
          Weren't you predicting hyperinflation a few months ago? Or was that DimPrawn? Easy to confuse you with him, the posts all just merge into a single long post of doom sometimes.
          "A life, Jimmy, you know what that is? It’s the s*** that happens while you’re waiting for moments that never come." -- Lester Freamon

          Comment


            #6
            Originally posted by Freamon View Post
            Weren't you predicting hyperinflation a few months ago? Or was that DimPrawn? Easy to confuse you with him, the posts all just merge into a single long post of doom interspersed with irrational, uneducated, and frankly hysterical pontification sometimes.
            ftfy

            “The period of the disintegration of the European Union has begun. And the first vessel to have departed is Britain”

            Comment


              #7
              Originally posted by Freamon View Post
              Weren't you predicting hyperinflation a few months ago? Or was that DimPrawn? Easy to confuse you with him, the posts all just merge into a single long post of doom sometimes.
              We have different personalities!

              Comment


                #8
                Originally posted by AtW View Post
                We have different personalities!
                But both appear to be fitted with the same low-grade intellectual apparatus.

                “The period of the disintegration of the European Union has begun. And the first vessel to have departed is Britain”

                Comment

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