Vocal Voices

Reading the tea leaves, the BOE stance that the current inflation is only a short term shock and it will go back down later in 2017 is looking more and more like wishful thinking.

We've already breached their worst case for 2017 and it looks like it will go higher. What level do they act at? 4%? 5%? 7%? The BOE has told us over and over again that early and precise action saves pain and woes later on. Now, I wonder, when are they going to take their own advice?

Reading and listening to the media it is ever so obvious that any fears are being gently massaged.

The one common refrain is that price inflation and wage increases are now at roughly the same level. This will, of course, lead to us spending less because we have little or no spare cash and that will cool things down.

Trouble is that it all looks like crystal ball juggling. If what is seen in one does not fit then look in another.

The key point in this, for me, was that the BOE has just stated that things are "a bit up now, but will come down gradually in 2017". They must have known these figures before they spoke and must have known that "a bit up" was a major understatement. Which makes their position much more "hold fast and pray" rather than knowledgeable and timely action.

Which makes a mockery of their performance.