Bloomberg reports Mervyn King at the Bank of England is warning that inflation may exceed 3% - the highest rate in a decade. Fair enough - sounds worrying, but we’re sure Mervyn and the team are on top of things. Hang on though, here’s Reuters with a report that Mervyn King at the Bank of England is signalling an interest rate cut at the start of February.
For those of you who might be new to all this economics stuff (I’m talking to you, Mr Alastair Darling) it’s generally agreed that lower interest rates contribute to inflation, so forgive me if I’m missing a really obvious point here, but isn’t it a bit odd that the BoE would be warning of rising inflation while at the same time hinting at rate cuts? It couldn’t possibly be that the people who report this stuff don’t actually have much of a clue what’s really happening and simply resort to half baked speculation, could it?
