The UK inflation rate is now 55 per cent above target. The Bank of England last week revised its forecast up, expecting the rate to be double the target early next year. This is the same Bank that forecast 2 per cent inflation for 2022-23, only to see the rate hit a totally unacceptable 11 per cent .
The politicians talk endlessly about a cost of living crisis, picking up elector disapproval of rising prices and squeezed household budgets. They tell us that the Bank is independent, refuse to criticise its poor performance and lose elections if they are in government as the public holds them responsible.
The exchange of letters last week between Bank and Chancellor was pathetic, missing many of the main points and seeking a common excuse for their joint failure. The Bank has to publish a letter when things go wrong. The Governor signed one that decided to blame the inflation on world energy prices. There was no explanation of why their previous forecast had not factored in Middle East turmoil. The conflict between Iran and her proxies with Israel, the US and others is not new. There was a statement that inflation was going to get worse. The Bank pointed to lower private sector wage settlements and squeezes on companies as giving hope of lower inflation whilst forecasting the opposite.
There was no mention of the big surge in public sector wages, no reference to the continuing poor public sector productivity, to the huge costs and losses of HS2, British Steel and the railways. There was no comment on the huge council tax rises where grants have been reduced, nor of the average council tax rise well above inflation.
Worse still, when the one sided analysis gave way to conclusions about what the Bank should do, the author clearly needed to break off from the home computer and end in a hurry. I assume that, as the Governor is paid £500,000 a year, he has people to write his letters for him. We are simply told keeping the interest rate where it is will bring inflation back down to 2 per cent sometime after it has hit 4 per cent. How? Why?
There was no mention of the MPC ‘s momentous decisions to loosen monetary policy by selling fewer bonds in the market. The Inflation letter tells us the monetary stance will, in due course get inflation down, keeping the base rate at 3.75 per cent. Why was there no mention of getting the 30 year rate down a bit by cancelling long bond sales? How does that fit in? I happen to agree with that policy, whereas the Bank since 2022 until now has helped force long bond interest rates up a lot, without seeing that as part of its counter inflation policy.
The Chancellor’s reply was pathetic. He offered no constructive criticism to help get inflation back down. He decided to cower in the Bank’s shelter, claiming alongside them that inflation was the fault of an unruly and unpredictable Middle Eastern oil market. He thanked the Bank for its work, did not condemn the further forecast rise in prices and accepted current policy would come right eventually. Had he noticed inflation might not be back down to the 2 per cent target by the next election? Did he know Labour took over in 2024 when inflation had got back to target?
He assured the Bank – as if they were the bosses – that he will avoid excessive borrowing. Did he know he plans to borrow over £300bn next year to cover extra spending and debt repayment? He said the UK will help re-open the Straits of Hormuz. When and how? Will he borrow some warships to do that?
His absurd contribution to the price surge was to remind the Governor of £1 off some bus fares and the temporary VAT removal from electricity. The bills still go up, of course. No mention of the excessive expense of renewables, the cost of keeping stand by gas and the carbon taxes which lumber us with the dearest electricity of the G7. No mention of the way government is pushing up public sector costs, charges and taxes.
Both the Bank and the Treasury have a poor track record on inflation this decade. The government is fuelling it with its lax approach to public sector costs, its tax rises and its high borrowing. A mayoral tourist tax will see more rises in holiday costs. The Bank has lurched from an excessively easy monetary policy to a much tighter one. The Monetary Policy Committee offers little or no commentary on the rate of growth in money and credit and lacks interest in the role of money in inflation.
The recent exchange of letters does not instil confidence in their policies and show no understanding of the role domestic policies have played in driving prices higher. Once again they leave us well above the target they are meant to hit. Policy meanwhile drifts and the Chancellor fails to take action to rein in the cost of living pressures on a large enough scale to have a useful impact.
September 25, 2026
Good morning.
So how do we stop this ? Because as I said yesterday, no matter who gets in, the same problems continue.
The BoE is only interested in inflation, nothing else. So it will work to that end of lowering inflation. When said targets are not met, he writes a letter to the Chancellor to explain why. And then what ? Nothing ! May I suggest a few changes:
1) When the inflation target by the BoE is not met. Instead of the Governor of the BoE writing to the Chancellor, the Chancellor writes the the Governor to tell him that this is his first warning out of three. Keep failing to control inflation and you out of a job. Simple.
2) Instead of inflation, why not change it to GDP per Capita ? Inflation figures are a nonsense anyway, but GDP per capita tells us how much poorer we are getting.
September 25, 2026
The inflation figures are open to huge manipulation – how do you compare the cost of say a brick mobile from 1982 mine was about £1200 to a hugely more sophisticated and flexible one today costing £100 that is a video phone, movie player, videos recorder, payment method, computer, word processor, camera…
Or a car today (far more fuel efficient, safer… ) costing about 25% of an average wage rather a two average wages in 1970. TO CHANGE inflation just choose a different basket of goods. Inflation for a retired person is hugely different than inflation for a young person or one with children or a large mortgage.
GdP figs though include government spending that often does huge net harms like the Covid Vaccines or Net Zero lunacy.
Reply It is quite clear UK energy prices are too high and going up, mortgage rates are rising and food is getting dearer. They change the basket of goods over time to reflect changes in technology and buying habits.
September 25, 2026
R to R
The inflation rate should be set to things we cannot avoid paying. eg Council Tax, energy etc. Then and only then we will get the true costs.
September 25, 2026
Some suggestions that the UK are already paying our tax payers money over to Mauritius even though the Chagos deal has not even gone through and cannot without US agreement. Is this true? The Guardian says “The UK government is not currently proceeding with payments, as Defence Secretary Wes Streeting announced that all financial disbursements to Mauritius are on hold pending a government review” So has any been paid it seems so form this wording by Streeting.
The deal was already moronic but to pay in advance of the deal (to give Chagos to Mauritius (China in effect surely?) is even more insane. Was this Mastermind Lammy’s idea?
So now Burnham has his own two tier political prisoner, 2 years for throwing a plastic bottle (surely at most a litter offence. To deter the other protesters. Yet for illegal migrants, shoplifters, burglars, phone snatchers, machete carriers… virtually zero deterrent at all.
September 25, 2026
A phone that is also a music library, book library, video library, advertising machine, a health monitor, exercise monitor, a shop, a university, accounting machine…
“The recent exchange of letters does not instil confidence in their policies and show no understanding of the role domestic policies have played in driving prices higher.”
NOTHING about Burnham, Starmer or Labour instils any confidence at all especially the fact that we are likely to get three more years of them then perhaps some messy lefty coalition.
To get inflation down deregulate hugely, halve the size of the state, stop borrowing so much, ditch net zero and the climate change lunacy and stop debasing the currency with endless QE, relax planning, scrap the workers rights and tenants rights acts, remove VAT from school fees…
September 25, 2026
Reply to Mark B
In the private sector the present Governor would be long gone. His delivery against the main KPI has been appalling and would not have been accepted.
Why has there not been more outcry from the media about his woeful management?
September 25, 2026
GDP per Capita would starkly remind the public that importing voters by the millions who make no contribution effectively reduce per capita wealth.
We get poorer by the month as the national cake remains the same but is shared by many more mouths.
We are heading for a crisis which is going to expose the ruinous government policies as inflationary and illogical.
This winter is going to be very tough on low income families if the wish to eat and heat. That is assuming we have a functioning power network.
September 25, 2026
Off topic, sorry, but I am incandescent with Rees Mogg make a huge effort, now in the Spectator, claiming that ‘The English are a mongrel race’.
The English are NOT a race but a nation.
Denying the existence of the English nation, in 2026, is genocidal.
Have we forgotten the Empire the English built? The massive contribution THE ENGLISH have made to the feeding and comfort of mankind, THE ENGLISH COMMON LAW!
Rees Mogg advises me to look to my DNA. I have done. Over thousands of years my DNA shows that I am from the north of England, Scotland and Ireland with less than 1% Nordic (Viking) blood. I’m very ordinary in England. My blood group is RH negative, unique to Britain!
But this Mogg calls me a snowflake, but wants me to go to fight Russia ‘for the glory of the United Kingdom’ in Ukraine!
JR, as a friend would you tell Mogg to close his computer and pipe down. He has done untold damage. The new Lord Haw Haw.
September 25, 2026
@Lynn Atkinson – you are right as usual. I remember someone a while back from Scotland using the Courts to claim racial discrimination. There is of course the ‘human race’ but after that those claiming racial discrimination should be required to prove they are something other than ‘human’ first as part of any claim.
Then again the UK’s own Parliament refuses the concept of English Common Law, they have tied the UK and its People down to the Napoleonic Law of tyrants. I would guess they believe it gives them more power, more control and hides their stupidity.
September 25, 2026
‘Blood type distribution by country’ wikipedia. RH-negative is present in most countries, the UK has its O-, A-, B-, AB- a bit bigger (20%) than other countries, still Spain (18.5%), Serbia (17%), Slovenia (17%), Sweden (16%), New Zealand (16%), Australia (16%), Austria (15.4%), Germany France (15.2%), Germany (15%), Netherlands (15%), Albania (15%), South Africa (14%), Ukraine (14%), ….
And is that something to be ‘proud of’?
September 25, 2026
Now ask Wiki where genetic British people live across the world.
September 25, 2026
A bit harsh on Jacob only about 50,000 years back our relatives were nearly all in Africa so perhaps not so diverse. 375 million years ago we were a lobe finned fish so even less diverse. CO2 then about 5 times higher than current but mankind still managed to evolve from fish. Despite ice ages and climate change.
September 25, 2026
Ll. If you actually believe we all eminate from Africa then you are dumber than I thought. Explain Sino Asians, East Europeans and indigenous Ausies and Kiwis to name but a few
There are probably 10 distinctive races which definitely didn’t start from Africa. They still haven’t invented the wheel and they certainly didn’t build the Pyramids.
September 25, 2026
Must have been the lobe finned fish playing too much with their 4×4 pettrol jet skis that caused this CO2 I assume – but they clearly survived the high 5 X current CO2 levels – to evolve into land living vertibrates and humans.
This even though the major ice ages and the warm periods I assume these fish passed an early version of Ed’s Climate Change Act and May’s Net Zero Act.
September 25, 2026
Did you see the discussion? If not you should watch, it’s all over X.
If there is no British nation why should we be conscripted (and jailed if we are objectors) to go to fight Russia ‘for the glory of Britain’? This from the treasurer of the Fabian Society.
September 25, 2026
50,000 years ago there was no ‘Africa’.
September 25, 2026
The arrow of time says all things decay, so the only way we can have human beings today is by there being super human beings in the past.
September 25, 2026
No penalty for failure, so no one seems to be really bothered about any sort of failure.
No skin in the game.
Just going through the motions.
Seems to be the case with all Government Departments.
No point in writing a letter if nothing happens, so really a complete waste of time and effort.
September 25, 2026
What would they do without having Russia/Ukraine and Middle East strife to point to and hide behind?
Like many I don’t have a wide knowledge of economics other than basic common sense of not spending what you don’t have on what you can manage without. However, I’m not paid huge sums of money to know or have a plan or at least appear to be bothered.
The Bank Governor and Chancellor are supposed to know and are paid huge sums to act in our interests.
It’s either amateur time at the circus, or something more sinister.
I suppose when you know there will be no consequences to your inaction or ‘am I bovered’ attitude it’s easy to just carry on making errors.
There are troubles in the world, there always have been but surely we should have contingencies in all areas to cover?
Making a point of £1 off bus fares given the enormity of the rest of our bills, the national debt already incurred and with seemingly millions to throw hither and thither at all and sundry, is either taking the proverbial out of us, or showing what pea brained fools really are in charge.
I suspect it’s a bit of both.
September 25, 2026
@Michelle – the ‘Blame Game’ is the only game in town for the incompetent. For the last couple of generation is not more their has always been some strife somewhere that gets to affect our daily situation, the reason we have a Parliament, a Government is to have people in place to build self-reliance and resilience into our structures to take things in our stride. But NO, they want to play the tyrant themselves, preach religious political terrorism ahead of their job. There let out, their bogus let out is the ‘Blame Game’. Most of us ask what will get the blame next – its raining?
September 25, 2026
As of August 2026, the UK inflation rate stands at 3.1%, positioning it slightly lower than the United States (3.4%) and the Euro Area average (3.2%). While the UK previously suffered from the highest and most persistent inflation in the G7—peaking at a 41-year high of 11.1% in October 2022—aggressive interest rate hikes by the Bank of England have successfully brought the UK headline rate back in line with its international peers
Russia’s full-scale invasion of Ukraine in 2022 enabled the fossil fuel industry to ramp up global gas and oil prices, making £billions and £billions in windfall profits. Sunak’s government then gave them a subsidy of £45billions in the winter 2022/23 (the £65/month paid directly to domestic energy suppliers plus support for businesses)
Because the UK is highly dependent on “natural” gas to determine its overall electricity pricing, this has hit British household utility bills exceptionally hard. More recently, conflicts in the Middle East have caused secondary spikes in global crude oil, driving up the cost of petrol and diesel at UK pumps
It’s price gouging by the fossil fuel cartel that has ramped up inflation in the UK, causing the highest interest rates in 15 years as the BoE tries to get it under control
Note for “Tricky Dicky” Tice and Kemi Badenoch – nothing to do with net zero whatsoever. Just profiteering by Big Oil and Gas.
Reply What nonsense. Our electricity prices have risen more the more renewables we have, as we have to pay twice for them. Once for the high guaranteed prices and subsidies to produce them, and one to have gas power stations on stand by for when they do not work. Meanwhile the government tax gouges us for fossil fuel with higher corporation tax, windfall tax, fuel duty and carbon tax!
September 25, 2026
@Reply – a bit like having a Chancellor that double counts, thinks a Budget is just about spending, removes money from the economy so it falters, then tries to preach that everything that costs those that earn more is a saving. Delusion comes from what some think of the ‘top’
September 25, 2026
Reply to Sakara Gold
If ‘fossil fuel’ cartels was the main price driver, movements would not be predicated on global events.
What we are seeing is markets in action. Supply and Demand are the basic drivers in free markets and impact prices.
The most influential cartel in fossil fuels over the last 60 years has been OPEC. That cartel has seen substantial transfers of wealth to many sovereign nations and the Swiss accounts of unscrupulous despots.
It is also true to say that a profit maximising corporation will strive to dominate their market squeezing out competition. But, frequently, it is the lowest price best value provider that attains market share.
As an aside, I think the UK may have suffered in the past because our Regulators at the MMC were focused on domestic competition with little consideration that a sole UK manufacturer may be the inevitable consequence of an increasingly global marketplace.
September 25, 2026
“Supply & demand and free markets” (and real freedom of choice) YES please. In energy, health care, education, transport, housing, banking… alas government just parasitically grow and grow to frustrate this.
September 25, 2026
“Russia’s full-scale invasion of Ukraine”: SG, surely you forgot to add the usual “unprovoked`’.
September 25, 2026
Frack!
September 25, 2026
If SG keeps repeating that gas pruce regulates the price of electricity no doubt she will eventually believe it.
Many countries relying on hydrocarbons for generation have electricity prices a fraction of ours. then again they don’t run two parallel grids.
September 25, 2026
The problem with weather dependent, chaotically intermittent, renewables, prone to long periods with low or even close to zero power is that achieving an ever higher percentage of renewable generated electricity requires an ever increasing overbuild (and replacement/maintenance) cost of renewable and grid infrastructure together with an ever increasing cost of building and maintaining the backup system because, although it is used infrequently, must be both immediately available and sized for peak demand to prevent a total collapse of the supply of electricity made ever more critical as the goal to electrification is completed. This is known as the firming problem. In addition, the ERoEI (Energy Return on Energy Invested) for renewables is so low, particularly for solar, which is below zero, that they must be manufactured using fossil fuels and are only appear to be economic because we are relying upon China, a state described by our security services as “hostile”, for their manufacture and who use as well as fossil fuels, slave labour and ignore all the environmental damage caused by mining, manufacturing tailing lakes and the illegal logging in the Amazon for the balsa wood for wind turbine blades. Relying upon China supplied renewables is not a recipe for energy security or for reliable, abundant, affordable energy. It is a recipe for disaster.
September 25, 2026
There are some deluded individuals that would read ’55 per cent above target’ as a positive. What’s the betting those responsible for such a dire situation still get bonuses.
In the real world of commerce, industry, finance and business generally those culpable would have been given their marching order long ago, They are what one could call lucky, their bosses the ones that authorise the payment don’t even know how to manage themselves let alone what their own job is.
September 25, 2026
High-ranking Kremlin officials have effectively rejected the recent US-Ukrainian proposal of a limited energy ceasefire and continue to reiterate Russia’s unwillingness to engage in any meaningful peace negotiations
Kremlin Spokesperson Dmitry Peskov stated “absolutely” in response to a question on whether Western energy ceasefire proposals are a rhetorical exercise, effectively rejecting Trump’s proposal for a ceasefire of long-range strikes on energy infrastructure
The war criminal Putin, eager for another bilateral meeting with Trump to carve up Ukraine in the absence of Zelenskyy, immediately started his usual tactic of employing “preconditions” before any such meeting can take place. The first of which is that Putin will only meet with Zelenskyy in Moscow!
Putin’s statements demonstrate his continued unwillingness to accept any diplomatic ceasefire, or peace proposals on any terms that fall short of fulfilling Russia’s maximalist demands of Ukraine’s complete capitulation and surrender to Russia’s territorial demands. Despite the failure of his “summer offensive” which has resulted in the liberation by Ukraine of 750 square Km of occupied territory in the Donbas and Zaphorizia sectors
The Russian Ministry of Defence (MoD) and Russian milbloggers are simultaneously doubling down on baseless claims that Russian forces have encircled Ukrainian forces in various sectors of the frontline, likely as part of the Kremlin’s cognitive warfare campaign to portray Ukrainian defences as collapsing.
The ISW have refuted these claims; the Russians are being forced back particularly in the Lyman sector. These intensified claims of encirclement come as Ukrainian forces have made significant advances in priority sectors of the frontline. The likely aim is to distract from the Ukrainian successes for domestic consumption
September 25, 2026
I’m afraid the energy ceasefire was agreed and Ukraine spectacularly broke it (again).
I seem to remember you applauding the result.
September 25, 2026
Perhaps Bank of England employees and monetary policy committee members should have their wage rises limited to 2% rather than taking account of inflation. This and the non-index linking of their pensions in future might focus their minds on the problems faced by normal people and the factors that cause their oncome to be worth less over time.
September 25, 2026
Now John, I note you have dismissed the ceiling on bus fares as not a significant fiscal policy. I think you need to remember that is the scale of the Labour mindset evident in its Westminster Party thinking. They imagine a one pound cut in what individuals pay who actually ride our busses, will make a significant impact on state funding and borrowing. Well it is either that or they are trying to bribe a cohort of their followers to keep following….
We now have politicians behaving line parish council members debating when the next jumble stall event will be held. These people are not fit for political purpose and the idea one of them would be capable of being Chancellor is laughable.
September 25, 2026
‘lower private sector wage settlements’ which now stands at 2.9% in the private sector, because the money has been removed from the economy by a Chancellor in a Budget. Then in this deluded world of a UK Parliament , The State employed receive up-to 6.4% wage increase and productivity goes down.
Using real Math the State has awarded their people up-to a 120% wage increase while stealing from those that ‘earn’ That is how a Budget works
September 25, 2026
Lets get real, is there a UK Parliament, have they a Government in place? From today’s headlines ‘Record spending on imports triggers mounting food security fears. Expenditure on foreign produce such as poultry and beef jumps to £33bn, new figures reveal.’ Then ‘The NFU claimed the UK’s self-sufficiency in 10 out of 11 everyday foods, such as wheat, vegetables, beef, poultry meat and eggs, has fallen in the last 30 years.’
It is NOT just the BoE that the UK Parliament and ‘its’ Government is in charge of(the BoE is not independent if the government takes money from us to keep the afloat – so government is the management), they are also in responsible for our security, resilience and ensuring self-reliance. Parliament has maliciously attacked our structures, our farming, our energy, our ability to defend from threats – they clearly the seek to deprive/destroy this nation and its people while others the world majority go on and prosper.
In this two tier Socialist Society we pay twice for most thing due to basic incompetence of those employed to manage all situations in all circumstance.
Some of us will see ‘sunshine and blue sky’s’ today – what will that get the blame for causing?
September 25, 2026
? Voters, labour voters..
Labour’s army of migrants: 83,279 small-boat arrivals since general election now outstrip the strength of the regular British Army
September 25, 2026
we live in an extremist state, everything is broken, justice doesn’t exist, and yes monetary policy is banana republic style. the country is being handed over to people who hate us. I dont know why you bother John, democracy does not exist here, and your obvious points will not impact the blob running the country. we are all extremist right wing terrorists now apparently.
normal political debate is pointless.
inflation is now being used to steal from those who have been prudent and saved, to fund an ever bigger underclass and state.
September 25, 2026
The two Fabians (three including the PM) will be thinking how to end this politically embarrassing exchange of letters. There are two possibilities. Firstly they can replace data with modelling as has been used successfully in both climate science, health and elsewhere. This will produce the wanted outcome. Or they can simply cease to publish any inflation data saying that they no longer keep this data and if anyone else publishes a figure they think is incorrect then the PM’s new National Centre for Information Defence (NCID) announced at the UN will be called to take action.
September 25, 2026
What a damning revelation of collusion between the Treasury and the Bank – Neither are doing their jobs to an effective level, and both are excusing the sins of the other.
Certainly the people at the Bank are supposed to be the specialists in the economy, even if the Chancellor has few credentials to manage that same economy. Are the so-called specialists asleep, are they aware of their own failures or are they deliberately ignoring the consequences?
Those parliamentary committees that are supposed to monitor and scrutinize the operations of the Bank clearly are also missing a good deal of expertise if they can’t make the Bank stand up and perform better.
Something is badly broken.
September 25, 2026
IB: If the available figures are correct the deportation / removals rate specifically for the illegal Channel boat arrivals is only around 3% – 4%. There are so many legal obstacles which prevent fast removal and a government unwilling to take radical action or make meaningful law changes.
The figures May to August 2026 are very steady and September looking to be the same.
Total arrivals: MAY: 2726, JUN: 2742, JUL: 2316, AUG: 2571
SEP: So far 01 SEP to 23 SEP : 2052.
How many hotel rooms cover that influx – two to a room if we’re lucky, maybe 6000 plus.
September 25, 2026
Burnham’s new disinformation unit could so easily turn out to be a 1984 style Ministry of Truth.
During the covid era secret government units recording, flagging, and triggering the censorship of Britons’ lawful speech. They included:
– the Counter Disinformation Unit
– Research, Information and Communications Unit
– Rapid Response Unit
– Ministry of Defence’s 77th Brigade
I’m not inclined to believe that this latest unit will be used just to deflect foreign interference.
September 25, 2026
The exchange of letters proved that both the Governor of the BOE and the Chancellor are incompetent. Reeves and Starmer were bad enough, but the signs are that our new PM and Chancellor are even worse. What has the UK done to deserve such incompetence?
Every Labour Government in my lifetime has left the UK worse off, but this one seems even more useless. What sort of a mess will the UK be in financially by 2029? No Labour Minister stands out as intelligent or as someone who knows what he or she is doing. I am in despair at opinion polls which show Labour ahead and the Greens having any following at all, likewise, the Lib-Dems with an even more incompetent leader!
September 25, 2026
We’re still importing 20% of expensive electricity from europe interconnector ….UK energy dashboard https://grid.iamkate.com/ …..no wonder inflation is so high
September 25, 2026
44 illegals crossed yesterday …..and our laws, our government, our parliament can’t do anything to stop the invasion !