Massive falls in inflation in June

[OwlHoot]

Policy is to have low inflation

How do you know?

That may be the stated policy, and may have been true until recently, but the overriding priority must be to get on top of the deficit and debt.

So for all we know the Government may be secretly quite comfortable with slightly higher inflation for now, while publicly saying they are striving to reduce it.

[AtW]

How do you know?

I have not seen any official decisions saying that inflation can be much greater than previous values (around 2%).

So for all we know the Government may be secretly quite comfortable with slightly higher inflation for now, while publicly saying they are striving to reduce it.

High inflation means bigger Govt spending on indexing public sector pay, pensions etc - if anything Govt is very interested in keeping inflation low.

What's political is that raising rates would do to house bubble what should have happened long time ago - politically it is a very difficult thing to do, so BoE was forced to get rates to the ground, something that is a clear proof that they are NOT independent.

[Doggy Styles]

Policy is to have low inflation, it has not changed for a long time - interest rates are a macroeconomic tool designed to deal with this problem, since BoE is supposedly independent it is not the Govt that should be responsible in any way for setting rates.

The bank is supposedly independent.

BoE is responsible for interest rate policy decisions that should keep inflation low (under 2%).

The reality of course is that BoE's "independence" is a sham.

You really don't comprehend, do you.

The BoE is not independent. It is not a sham, because it never has been and it doesn't pretend to be.

So, you blaming the BoE for not taking unilateral action on base rates to cool house prices, when the government is telling it to do something else, is stupid.

[AtW]

So, you blaming the BoE for not taking unilateral action on base rates to cool house prices, when the government is telling it to do something else, is stupid.

Yes, rates should have gone up BEFORE the collapse of banks even happened to cool down house price market.

[shaunbhoy]

Yes, rates should have gone up BEFORE the collapse of banks even happened to cool down house price market.

Yes, thank you Adam Smith!!