"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Tuesday, July 15, 2008

Bank of England warns "There's NOTHING we can do ...er .... right ....."

This is what Lord King Chairman of the Bank of England said in his annual speech to the great and the good of the City of London at the Mansion House just over one year ago on the 16th June 2007...

"Our central view remains that inflation will fall back this year as the rises in domestic gas and electricity prices last year drop out of the annual comparison, and the recent cuts in prices feed through to household bills."

PS : Mervyn has a pension pot of £4.8million, which should be worth nearly £180,000 a year on retirement...which cannot come too soon.


Bungalow Bill said...

Today (12th Aug 2008), figures published show that U.K. Inflation is at 4.4%, double the government's target (Mervin's kowtowing to the UK banks dodgy off balance securitisations wouldn't have helped)

Posting the Bloomberg Article in full, in case it gets updated/lost:

U.K. Inflation Reaches 4.4%, More Than Double Target (Update3)

By Svenja O'Donnell

Aug. 12 (Bloomberg) -- U.K. inflation accelerated to more than double the central bank's 2 percent target in July, making it harder for policy makers to cut interest rates as the threat of a recession looms.

Consumer prices rose 4.4 percent from a year earlier, breaching the government's 3 percent upper limit for a third month and the most since comparable records began in 1997, the Office for National Statistics said today. That exceeds the 4.2 percent median forecast of 38 economists in a Bloomberg News survey.

House prices fell in July and retail sales dropped as Britain veered closer to a recession, reports showed today. Record oil and food costs have kept inflation above the target for 10 months, prompting Bank of England Governor Mervyn King and his colleagues to refrain from interest-rate reductions since April.

``The risk now is that inflation rises above 5 percent,'' James Knightley, an economist at ING Financial Markets in London, said in an interview on Bloomberg Television. ``There is a risk of a rate hike, but the weakness in activity suggests that they're more likely to stay on hold.''

Knightley predicted that the Bank of England will cut the benchmark interest rate ``quite aggressively'' next year from the current level of 5 percent as the economy falters.

Brown's Woes

The pound rose as much as 0.2 percent against the dollar after the report before erasing its gains and staying close to a 21-month low. The U.K. currency was at $1.9023 as of 12:01 p.m. in London compared with from $1.9108 yesterday. It was at 78.27 pence per euro compared with 78.03 pence.

Higher living costs have added to the unpopularity of Prime Minister Gordon Brown, whose governing Labour Party trails behind the opposition Conservatives by 20 percentage points, according to a YouGov Plc survey published on Aug. 10.

Today's inflation data ``are yet another worrying signal for families desperately trying to make ends meet,'' Conservative leader David Cameron told reporters in London today.

Consumer-price increases are also accelerating in the euro region, where the inflation rate rose to 4.1 percent in July, the highest since April 1992 and more than double the European Central Bank's ceiling of 2 percent.

The U.K. inflation rate jumped from 3.8 percent in June. The 0.6 percentage point increase was the biggest since the series began in 1997. Based on a constructed index using retail-price data, it was the largest gain since 1991, the statistics office said.

Letter of Explanation

King will have to write his third letter of explanation to the government unless inflation slows to 3 percent in August, which would require an unprecedented drop in consumer prices.

The letter, setting out how he would return inflation to target, is required under rules established when the bank won rate-setting independence in 1997.

Consumer prices stayed unchanged on the month in July. The inflation rate jumped after the cost of food and non-alcoholic drinks rose 12.3 percent from a year earlier, the most on record, and energy prices increased, the statistics office said.

Oil prices have dropped 19 percent since reaching a record above $147 a barrel on July 11. They are still more than 60 percent higher than a year ago. Producer prices increased in July at the fastest pace since records began in 1986, the statistics office said yesterday.

So-called core inflation, which strips out costs of food, energy, tobacco and alcoholic beverages, accelerated to 1.9 percent in July, the most since June 2007.

Pay Pressure

Retail-price inflation, which pay negotiators use as a measure of the cost of living, quickened to 5 percent, the fastest pace since 1991. Excluding mortgage-interest payments, it reached 5.3 percent, the most since 1992, today's report showed.

Faster inflation has yet to stoke pay pressures. Wage data due tomorrow will probably show salaries including bonuses increased 3.6 percent in the second quarter, the weakest pace in almost a year, according to the median of 30 forecasts.

Slowing economic expansion may curb inflation. The International Monetary Fund last week slashed its forecasts for U.K. growth to 1.4 percent this year and 1.1 percent in 2009. The economy expanded 3 percent in 2007.

House prices fell in July as the squeeze on credit locked out buyers and brought the property market to a ``virtual standstill,'' the Royal Institution of Chartered Surveyors said today. Sales in shops open at least a year fell an annual 0.9 percent, the British Retail Consortium said in a separate report.

Slowing economic growth has pushed up unemployment. Claims for jobless benefits probably climbed for a sixth month, increasing 17,000 from June, according to the median forecast of 31 economists in a Bloomberg News survey. The Office for National Statistics will publish the figures tomorrow.

The Bank of England predicted on May 14 that growth will slow to a 1 percent annual pace in the first quarter of 2009, the weakest since 1992. King said then that there may be ``an odd quarter or two of negative growth,'' while predicting inflation would quicken to more than 4 percent. The bank will release new forecasts tomorrow.

ziz said...

Many thanks BB from BB - the incompetence is truly mind and capital blowing. Probby best to import Mugabe to give advice on controling inflation.

"The Office for National Statistics will publish the figures tomorrow. "

One wonders when they will get around to producing some more accurate and up to date figures on money lost to HM Treasury by Carousel (MITC) fraud, not to mention Child Tax Credit overpayment etc.,

(C) Very Seriously Disorganised Criminals 2002/3/4/5/6/7/8/9 - copy anything you wish