European champions at last

Chris

This is what a weak currency policy does for you. Let's hope all those vocal opponents of the euro enjoy having the value of their savings wiped out. I don't.

HJ

It's not that surprising that we have the highest inflation because of the rise in VAT which probably added somewhere near to 1.5% to the inflation figures.

However, the effect of the VAT rise will fall out of the annual figures in January - which will then provide a truer figure for comparison.

oceanside

If only this was consumer demand led, and not driven by increased costs for producers....

daniel maris

Memo from Steve to Dave to George:

"Please line up excuses e.g.

Previous Labour Government

Eurozone crisis

Threat of trade union strikes.

Do not mention bankers, higher executive pay or captive consumers. "

Dennis Churchill

Hardly a surprise. Surely this has always been the objective?
Inflation is a tax by another name and a very regressive one at that.
To paraphrase (from memory) Hazlitt:”the public would never accept a wage reduction of 5% with inflation at Zero but will accept a wage increase of 3% with inflation at 10%”

daniel maris

Do we officially have stagflation now then?

Holly ......

A bit along the lines of the growth figures then?
German growth latest = A ROBUST 0.05%
UK growth = A PITYFUL 0.05%.

It's the way you tell em.....Over & over again does not instil confidence in anyone

Yes things ARE bad, and being made much worse by Merkel fannying around and, you 'up
dating' us every fifteen minutes, so we all think it's worse now than it was fifteen minutes ago....
Bugger off.

Chuck Germany out of the bloc and we might just salvage something plausable over there.

Oh gosh!...Not forgetting the constant slagging off of how dismal & usless Labour were in government by, no other than the latest useless muck up of a Labour leader.

Things can only get better eh?...
Yeah if tonsil boy continues to spout more or less the same policies the Coalition are trying to get through, but are constantly opposed by Labour bods in the HoC...What a junk Labour leader & set journo's we have.

Hey I could be wrong & tonsil boy could be a genious....with Balls & Coop beside him,what could possibly go wrong?

That snigger was involuntary!

I'm off to watch Bolt!

Ian Walker

Interestingly, Estonia's constitution makes it illegal for the government to run a defecit.

So perhaps high inflation is a symptom of a well-run economy during a global slump?

starfish

So. take the VAT rise out and we are somewhere in the middle, with the prospect of it reducing

Wheras in the Eurozone....?

Dennis Churchill

starfish
November 17th, 2011 2:06pm
I see Ireland will increase its VAT rate to 23% at the next budget. Their government has already mortgaged the taxes of its unborn citizens to bail out its banks. What a mess this is turning into.
Our political class are just not up to these types of problems, they are good times only which is why they are obsessed with Equal Outcomes and micro-managing our lives.
I suppose it is inevitable when your political class have virtually no experience outside politics and are really glorified student activists.

wiliamson

Arent we also the European champions for putting the most in and getting the least out?

Walter Ellis

Conservatives, and others, in the UK frequently point to the crisis in the Euro as proof of the economic ineffectiveness of the European Union. We stayed out of the Euro, we tell ourselves. Weren't we the clever ones? Now we should take the opportunity to "review" all other aspects of our EU membership and, preferably, leave the ramshackle enterprise altogether.

The reality is that sterling is a weak and unregarded currency. We can devalue or revalue all we want, but the pound is an international irrelevance.

Just as important, as the graph above shows, the British economy is in deep trouble. Inflation is starting to get out of control. Mervyn King may appear wise, but his interest rate strategy has done nothing to keep prices down.

British government debt is huge. The trade deficit is a yawning chasm. We have lost our manufacturing base, and the financial sector that was supposed to replace it is not only 95 per cent centred in London but is a disgrace. Unemployment is approaching record levels, and even if there were good, high-tech jobs available, most of our native young people are ill-equipped to fill them.

The EU faces grave problems. But, if anything, Britain's underlying position is worse. and, as David Cameron pointed out the other day, if we leave the Union and decide to go it alone, we will lose our right to affect change in Europe while remaining dependent on it for our livelihood.

Some solution! Some neck!

TomTom

Inflation is a chronic British sickness but is the only way a country with such a large Non-Productive Sector keeps afloat. Bacon & Eltis looked at the problem 30 years ago and it is much, much worse now. The living standards of non-workers in terms of consumer durables and housing is not explicable by any economic theory and can only be based on credit expansion as a systemic means of inducing nominal economic growth in the hope it generates a little "real" growth. It is the ultimate illusion of chasing the dragon

Herr Kartoffelkopf

@Walter Ellis

Right, thanks for the yawn-inducing, cut-and-paste, armchair critique - what would your solution be then?

normanc

Walter Ellis, it's a logical fallacy to say that the Euro hasn't been an economic success therefore anyone not in the Euro is an economic success. I don't think anyone thinks that way.

I don't think it's stretching the bounds of credulity to suppose that if we were in the Euro our situation would be worse but there is so much needed to be done to turn around our economy whether or not we're in or not in the EU / Eurozone is not the only factor.

Things would certainly be easier out of the EU / Eurozone but even leaving the EU would be no guarantee of success, just like staying in is no guarantee of failure.

Holly ......

Walter.
If Chancellors had set an inflation target at say, 8-10%, we'd probably never hit that target either.

Just because there is a target of 2% does not mean anything else is absolutely bad.

If you disagree with politicians on most of what they say/do, why do you insist on saying the same politicians having a 2% inflation target is the most important thing they ever said/did?

Ask yourself this...As I did,
If a certain supermarket can flog a 4pack of Chrunchie for a £1, for weeks on end, how come last week they shot up to £1.78?
Inflation dropped a bit...I stopped buying packs of Chrunchies.
Was £1.78 the true cost of the Chrunchies or has the supermarket just decide to milk it's customers now prices will start to drop a bit?

'Unexpected rise in retail sales in October.
Up 0.6%- Sales volumes in *small stores* up 5.3% yr on yr- The biggest increase since 2004!!....
Cheer up Walter, it's not all bad.
Try to ignore what is said and do what you can to be happy(ier).
Today's sunrise by us was absolutely beautiful and free from political,media & financial interference.
Un-buyable whatever the rate of inflation.

starfish

"The EU faces grave problems. But, if anything, Britain's underlying position is worse. and, as David Cameron pointed out the other day, if we leave the Union and decide to go it alone, we will lose our right to affect change in Europe while remaining dependent on it for our livelihood."

This is a complete myth

We have a trade deficit with the EU - it is in their interest for us to remain a trading partner

They cannot erect barriers to that trade without falling foul of the WTO

We are unable to affect change in Europe now due to QMV and the Euro bloc - I cannot see that situation changing so why stay part of it?

I cannot see how being shackled to a dying body is good for our future

Sir Everard Digby

Daniel Maris,

The Coalition and the 'Opposition' can start any narrative they like. Until they both confront reality, nothing can be properly resolved. Talking about what they are talking about is pointless,much like the political classes

AR

Inflation is higher than we'd prefer, but what's your solution? Interest rates so high we see reduction in nominal wages? Really?

Julian F

HJ - Thank you for highlighting the statistical anomaly that has been caused by the hike in VAT. I was beginning to wonder if I should be taken in by the blizzard of negative postings about the economy on this site. A little common sense wouldn't go amiss. We grew 0.5% in the most recent quarter, retail sales and automotive figures are both in positive territory in this quarter so far. Inflation, once adjusted for the VAT-effect is bearably above targets that were set for very different economic circumstances. We have a credible deficit reduction plan in place and our long term interest rates are, in the demotic, to die for. Why does the Spectator continue to highlight the negatives? There are many positives.

Walter Ellis

I tried to respond, but my comments weren't accepted.

Holly ......

Walter Ellis.6.34.

Welcome to the world of the Conservative party via the UK media.

Walter Ellis

Thanks, Holly. But the truth is my response was probably just too long and rambling. Beautifully written and acute, though: a maundering masterpiece. Europe and the world have lost a central reference point. Oh yes.

Dimoto

Julian F:

In answer to your question - because Jonathan Jones is a trivialist, whose manipulation of stats and fine line in smart-ass comments, makes him a prime candidate for a job on the Daily Mirror, perhaps ?

Cynic

It's no wonder inflation is so high - the pound has been trashed while we import so much stuff and the BoE has been printing money so fast the presses are red hot. It's my considered opinion that the aim was always to inflate the debt away - and b*gger the prudent and the savers.