UK CPI inflation rate rises to 5.2% in September

[Iron]

http://www.bbc.co.uk/news/business-15344297

That's the 22nd consecutive month that the 2% target has been overshot.

What's the point of having a target that's never going to be met?!?

Jeff

[superfrank]

And this is before the latest round of QE.

Unofficially the target was moved by the BoE many months ago but they have to keep up the pretense.

Anyone who doesn't believe now that their solution is to devalue/print/inflate is living in la la land.

Inflation is theft from workers and savers to give to the asset rich and debtors. Moral hazard anyone?!!

That Mystic Merv got a knighthood for his response to the financial crisis is pretty sickening.

[Iron]

On a point of trivia, he and Bernanke shared an office years ago, when they were both lecturing at the Massachusetts Institute of Technology, according to Wikipedia.

How those two got teaching positions at one of the world's top ten universities is beyond me!

Jeff

That Mystic Merv got a knighthood for his response to the financial crisis is pretty sickening.

[staker72]

"Theft from savers and workers" sorry I don't get it. Firstly it seems to say people are either savers, workers or asset rich. Most people are a bit of everything, i.e. a pensioner may benefit from a higher increase in pension but, depending on interest, suffer on their savings. However if the economy fails might find their annuities and house worthless. However a pure "worker" with no assets or savings will be unaffected in the long run as wages and prices will run in tandem. What is actually happening at the moment is a sort of world inflation as former 3rd world countries start competing for oil and other resources and their own costs are increasing as their workers start so share in their coutries growth. For a while western borrowing filled the gap but reality is starting to bite. The good news is that as their costs and currencies increas and ours fall in relative terms we cas start to compete again. An example being Santanders call centres coming back to hte UK. They didn't just do it for customer service, the cost advantages are a lot less now.

[Iron]

However a pure "worker" with no assets or savings will be unaffected in the long run as wages and prices will run in tandem.

I read this morning that the average annual increase in wages is 2%. So in real terms, people are worse off.

However, I agree that inflation doesn't destroy wealth, but redistributes it. But there's no getting around the fact that, at present, inflation combined with pretty much zero growth means that British households are becoming poorer (even if people in other parts of the world do benefit from said inflation).

Jeff

[superfrank]

"Theft from savers and workers" sorry I don't get it. Firstly it seems to say people are either savers, workers or asset rich. Most people are a bit of everything, i.e. a pensioner may benefit from a higher increase in pension but, depending on interest, suffer on their savings. However if the economy fails might find their annuities and house worthless. However a pure "worker" with no assets or savings will be unaffected in the long run as wages and prices will run in tandem. What is actually happening at the moment is a sort of world inflation as former 3rd world countries start competing for oil and other resources and their own costs are increasing as their workers start so share in their coutries growth. For a while western borrowing filled the gap but reality is starting to bite. The good news is that as their costs and currencies increas and ours fall in relative terms we cas start to compete again. An example being Santanders call centres coming back to hte UK. They didn't just do it for customer service, the cost advantages are a lot less now.

I agree that most are a mix but there's no denying that the policy response is designed to create inflation (which benefits those with debt at the expense those on fixed incomes and/or with savings).

I also agree that there is a levelling effect with western living standards falling while rising in developing countries.

The problem with devaluation is that both raw materials and finished goods become more expensive and the inflationary spiral continues.