Tuesday 17 June 2008

Dear Alistair...

Everyone hates getting spam. Letters you dont want which waste your time and their money, and the only people benefitting being the recycling lobby. Annual inflation has gone up by 3.3% and as it is now 1% above the target of 2%, the Governor of the Bank of England must write a letter to Alistair Darling about it to explain what is to be done to control price rises. Gordon Brown received one in April last year. It is expected there will be a couple of more these. Annual inflation has increased by 0.8% in the last two months alone.

Its a difficult situation because with with house prices falling the BoE has been under pressure to cut interest rates, but balanced against that is the danger of higher inflation leading to a worse impact on the wider economy. They have to wait for the worst to pass inflation wise first before they cut rates. In the meantime theres political damage for the Government.

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