higher inflation acceptable?

inflation spikes at 3.5% (bbc feb 2010)

boe inflation report feb 2010

letter to the chancellor

letter to the governor

The reasons behind the latest surge in inflation look fairly clear cut

1/ The lagged effects of the fall in sterling on import prices
2/ Much higher oil and gas prices and rising import prices for metals and other raw materials
3/ The effects of the reversal of the temporary cut in VAT
4/ Less discounting in the January 2010 sales compared to the same time last year when the UK retail sector looked close to meltodown!

And we can always blame the snow ........!!!!!

5/ Snow last month raised the price of certain seasonal vegetable prices, with cauliflowers rising by the highest amount since at least 1996 and the cost of carrots doubling



Guardian: More inflation may be better after all, says IMF

Paul Krugman: The Case For Higher Inflation

Economist Blog: Reorienting macroeconomic policy