Like the Road Runner’s Coyote speeding off a cliff, it will take some time before Britain looks down and realises that Brown has led us over an economic precipice. The CPI target of 2% inflation will be a joke – from now until about 2010. We’re likely to hit 5% by Christmas and stay there for a good chunk of next year. It will, quite literally, be the biggest overshoot anywhere in the world now – not just currently, but in the history of inflation targeting outside of Africa. Even the Bank of England is coming to terms with this, so we can forget a rate cut next week.
Citibank thinks we’re already in recession and forecasts growth of 0.3% next year and 0.9% in 2010. Yes, you read both of those figures correctly. Consumer confidence is the lowest since Callaghan was in power.
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