The mugger's accomplice

19 July 2008

The Spectator on the return of inflation

Is it fair to include Gordon Brown and Alistair Darling in our line-up? They did not cause the credit crunch or the commodity boom, after all, and Darling as Chancellor can hardly be said to have had any impact on anything. But Brown is the mugger’s accomplice: he misled the British public by claiming inflation was dead and that he helped to kill it; he misled them again by choosing the CPI as his preferred indicator, rather than the Retail Price Index which tends to stand higher; he sowed seeds of domestic inflation with a splurge of unproductive public spending during the second half of his chancellorship; and his government is now so strapped for cash that it cannot contemplate measures to ease the pain such as the Tories’ proposed ‘fair fuel stabliser’.

Brown is in fact no more able to halt inflation today than, despite his claims, he was personally instrumental in keeping it at bay in the previous era. It is for the Bank of England to solve the monetary equation — and that almost certainly means higher interest rates contributing to a short, sharp recession, in turn leading to spare domestic capacity that will reduce inflationary pressures; combined with an inevitable bursting of the commodity-price bubble, that should bring inflation back to its target range two years hence. All Brown can do is to hold a firm line on public-sector pay rises, in the face of increasing militancy from the likes of Unison and the PCS union; we wait to see whether he has the political courage to do even that. Meanwhile, beware: the mugger is at large.

Previous page 1 | 2 | 3

EyeSee

July 17th, 2008 7:43pm Report this comment

Naturally you have to factor in Brown's phenomenal stupidity. Forget all these 'ooh I've met him and his is a great intellect', we have seen what he has actually done at the Treasury and it is this; he never made any statement beyond those he had to. He never supported nor opposed anything. What he signed up for was power ('I want to be PM and tell everyone what to do') and money. He didn't sign up to do any work. If you and he were amongst a group of plane crash survivors, you'd do for him, not to eat him, but because he was there.

Post comment