Gadzooks, the December inflation increase is the highest on record. I’ll not witter on as I’ve done before on the dangers of inflation, This time I’ll point to some authoritative sources instead. Type inflation into the search box and you’ll soon see what I mean.
Let’s start with the bald facts, from the BBC’s report:
“The Office for National Statistics said Consumer Price Index (CPI) inflation rose 0.6% last month, with the annual rate up to 2.9% from 1.9% in November. That was the biggest monthly rise in the annual index since records began and exceeded the City’s expectations for an increase to 2.6%.”
Now some information for you to digest:
- Office of National Statistics December 2009 inflation report
- Financial Times Alphaville blog includes quotes from City experts
- Tony Bonsignore in the Citywire website worries about interest rate rises
- David Blackburn in the Spectator, writes, neatly, on the inflation dangers we face:
We are now seeing the long-term effects of Quantitative Easing and the use of debt to finance further government borrowing. A consequence of printing money is to devalue it – hence the collapse in Sterling and ever more expensive imports, notably crude oil, a commodity which itself has doubled in price over 12 months. With no current plans to arrest government spending and the VAT hike to kick in next month, the future looks miserable.
There’s an aspect to this inflation rate rise that is particularly worrying, and that is that the December inflation numbers were higher than predicted [data on this is in the Alphaville blog post]. Remember, there are hundreds if not thousands of people tracking this data, and both commenting on them and making predictions. These people don’t like surprises, and nor do we.
I’m sure I can guess what my favourite economist – Liam Halligan – will be writing about this weekend.