Inflation hits 3.8% as Bank of England says there is nothing it can do

[THE-BEAKER]

unfortunately i did not have the benefit of a private fee paying university education and also serving at the elite end of finance.

could i make a suggestion here to the governor and bernanke that perhaps they should do the following:

PUT INTEREST RATES FUCKING UP.


Inflation hits 3.8% as Bank of England warns: 'There's NOTHING we can do to stop prices soaring'
By Sam Fleming

Bank of England Governor Mervyn King warned of 'a sharp, but temporary, rise in inflation'
Inflation has soared to 3.8 per cent after a warning from the Bank of England that it can do nothing to alleviate the pain of rapidly rising prices over the coming months.

The Consumer Prices Index rose 0.5 per cent from May to June to hit the new figure, according to figures from the Office for National Statistics.

It is the highest ever recorded by the current measurement system, which was introduced in 1997. Analysts had been expecting a smaller rise to 3.6 per cent.


The underlying rate of Retail Prices Index inflation also rose, up from 4.4 per cent to 4.8 per cent while the headline rate, which includes mortgage interest payments, rose to 0.3 per cent to 4.6.

The new data comes after Governor Mervyn King signalled living standards will continue to be squeezed by inflation-busting increases on food and fuel well into 2009.


Attempting to curb the rampant price increases by raising interest rates sharply could lead to an even more painful economic downturn, he said.


Mr King made the comments in the Bank's annual report amid new evidence that the pressure on incomes is intensifying.


http://www.dailymail.co.uk/news/art...warns-Theres-NOTHING-stop-prices-soaring.html

 

[makloda]

The UK represents like what 5% of global crude oil and wheat/corn/soy/dairy consumption. King could jack up rates to 20% what effect would that have? Zilch.

 

[Cutten]

The UK economy is going to get pounded like a rented gerbil. Putting rates up is not exactly the best move under the circumstances, and would have the unfortunate side-effect of seeing King getting lynched in public. He can just keep them steady and let the total meltdown of the UK housing market help reduce inflation over the next year or so.

 

[Trendytrader]

Quote from THE-BEAKER:



Inflation hits 3.8% as Bank of England warns: 'There's NOTHING we can do to stop prices soaring'
By Sam Fleming

Bank of England Governor Mervyn King warned of 'a sharp, but temporary, rise in inflation'
Inflation has soared to 3.8 per cent after a warning from the Bank of England that it can do nothing to alleviate the pain of rapidly rising prices over the coming months.


http://www.dailymail.co.uk/news/art...warns-Theres-NOTHING-stop-prices-soaring.html

So what purpose does a central bank provide if not to stablize prices and inflation? More evidence that central banks are redundant and markets themselves are in control.

 

[gucci]

Quote from Trendytrader:

So what purpose does a central bank provide if not to stablize prices and inflation? More evidence that central banks are redundant and markets themselves are in control.

 

[Trendytrader]

3.8% CPI will look down right low in the future. I don't care what the economist call good or bad inflation e.g. wage driven inflation v's price inflation. The outcome is the same just look at Zimbabwe.

We are already seeing multiple double digit energy retail price increases for nat gas and electricity before this year is out. This will be the winter from hell for a lot of low income and middle income folks.


http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/30/bcngas230.xml

ritish Gas bills to rise by up to 35pc

By Emma Thelwell
Last Updated: 4:02pm BST 30/07/2008

Millions of British Gas customers will have their energy bills hiked by 35pc this winter as the company grapples with the rising cost of energy in the UK.

British Gas bills are set to rise by 25pc for millions this winter

Centrica, the owner of British Gas, plans to pass on rising wholesale gas and electricity prices to its 16m customers, after revealing that profits have plunged by 68pc in the six months to the end of June.
# How to cut your energy bills

Those 10m customers who just take gas from the company will see their bills rocket 35pc, while the 6m paying for electricity will be hit with a 9pc increase. Of its total 16m customers, the 5m who take dual fuel will see bills rise by 25pc.

The 2.1m people on fixed tarrifs will not be affected, alongside the 300,000 Britons on social tarrifs who will have their bills frozen.

The price rises will further increase the cost of living, which for the first time in over a decade is now outstripping average incomes, according to official figures.

British Gas said that wholesale gas prices have jumped 89pc over the last year, from 48p per therm this time last year, to 90.8p this year.

Wholesale electricity prices have risen by 72pc, up from £49.62 per mega watt hour to £85.58p mwh over the same period.

The soaring energy prices have cost the group £2bn extra, forcing Centrica to pass costs on to British Gas customers. Centrica is due to announce tomorrow that British Gas profits fell from £533m to £166m in the six months to the end of June.
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British Gas managing director Phil Bentley said: "We very much regret that we have had to make this decision at a time when many household budgets are already under pressure. The simple fact though, is that we have entered an era of unprecedented high world energy prices.

"The only answer to cope with higher energy prices, I’m afraid, is for all of us to be more energy efficient and we will be contacting all our British Gas customers to show how they can save energy to try and offset these price rises.”

The company said the UK is suffering from being part of the global energy market. No longer self-sufficient, the UK now has to import a large amount of energy for households across the country.

Centrica said it was trying to maintain margins at a reasonable 3-5pc. It also promised not to raise prices again this year for those on standard tarrifs. Those on social tarrifs will save an average of £240 from having their bills frozen. British Gas has launched a new fixed priced tariff without a premium today.

Mr Bentley added: "We are delaying the price rise for our vulnerable customers until after next winter, lowering the price increase for prepayment customers, launching a new fixed price tariff and helping all of our customers to make their homes as energy efficient as possible."