Andrew Sentance of the MPC has rushed into print this morning in the Sunday Times. He tells us we might have a very feeble recovery, thanks to the huge debt overhang in the US and UK, or we might have an inflationary recovery if India, China and other better placed economies generate their own growth and propel the world economy forward.
You don’t say! The MPC is not only meant to realise that, but to make a decision about which is the most likely and plan accordingly. It appears from their very loose money policy that they think the recovery will be weak and feeble. If they don’t they must have abandoned all pretence of trying to control future inflation, and be working under political instructions to try to generate any kind of recovery before the next General Election.
Make up your mind Andrew. We can judge what you think by what you do. What you do tells us you must think the recovery is going to be poor, hence all the extreme monetary activism. If it’s a normal recovery then beware the inflation your present policies will unleash.