According to the latest Office For National Statistics inflation in May has fallen to 1.5% assisted by a fall in food prices and lower fuel costs.  This is much lower than the BOE/Mark Carney had previously predicted and it’s the lowest level for 4 1/2 years.  If it falls any further it may even trigger a letter of apology from the BOE to the Chancellor for dropping below the indicated level of 2%. Continue reading →

We all know why President Obama is pulling the troops out of Afghanistan having done so in Iraq.

It’s good for momentary headlines particularly when you are trying to bolster up some unprecedentedly low approval ratings but what price is America and the rest of the world going to pay for this moment of injudicious political and military naivety? Continue reading →

With the unemployment rate falling faster than anyone imagined (particularly the BOE and IMF) and UK growth being refreshingly higher than any other country in the Q7, Mr. Carney is using the method of announcing the prospects of higher interest rates ahead of actually doing so.  This has all the advantages of raising interest rates without the disadvantage that it may have on the growth of the economy and confidence.

Mervin King used to do this when he was Governor and it was very effective.  The mere spectre of higher interest rates will start to have the desired effect on controlling the money supply before any changes are implemented. Continue reading →