As a blogger pointed out, the Input and Output price inflation is going up just as we feared. House prices are also on the rise.
The government may see this as a kind of success, with an election in the offing. The deflation they wrongly feared has not come to pass. Others see it as a sign of how weak the Uk economy has become, with rapid inflation in some assets and prices at a time when output is still very depressed, and when there are more than 5.5 million people of working age without a job.
The Chancellor and the Bank are silent on why this happening, just as the PM was when I asked him about inflation last year when it seemed likely it would go up. Could it be that their lop sided moneypolicy is to blame? Could it be that their policy of expanding the public sector and starving large parts of the private sector of cash is causing this poor performance?
Promoted by Christine Hill on behalf of John Redwood, b oth of 30 Rose Street Wokingham RG40 1XU