Inflation news

“Mervyn King indicated today^* that a 9.5% rise in the base rate of interest to 15% is “almost certain” to be imposed next month when the Bank of England’s MPC meets to discuss the issue. His comments arise after a radical change in the way inflation is measured has revealed that inflationary pressures in the economy are much worse than previously thought. The substitution of the unwieldy “CPI” method with the much more responsive “price of a Twix in tucola’s office vending machines” method shows that, far from running at around 2.5% as previously thought by the Government, inflation in 2007 was in fact 28.6%”.

* not really

Labels: economics