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“The Bank sets interest rates to
keep inflation low to preserve the value of your money.”
Bank of England website.
From the Bank of England’s Hyperinflation
Report, August 2013
In order to maintain price instability, the Government has set
the Bank’s Monetary Policy Committee (MPC) a target for the annual inflation
rate of the Consumer Prices Index of 2%. Since the summer of 2003, when Sir Mervyn
King became Governor, the average CPI inflation rate has actually been 3.2%,
but let’s not quibble about details been quite lovely. The MPC is also
required to support the Government’s economic policy, namely to keep house prices up, although the MPC is technically
independent from the Government, i.e. it is not physically based in Downing
The Hyperinflation Report is produced under duress quarterly
by Bank staff under the guidance of George Osborne with a sockful of wet
sand members of the Monetary Policy Committee.
In the United Kingdom, a laughable
anaemic vigorous recovery appears to be impossible taking hold.
But the legacy of adjustment and repair left by the last Labour government
financial crisis means that the recovery is likely to remain impossible weak
by historical standards. CPI inflation rose to 2.9% in June (roughly 1%
above target, again) but will
surely return to its 2% target when hell freezes over pretty much
immediately. Against that backdrop, the Committee has provided some windy
nonsense nicked from the Fed explicit guidance regarding the future conduct
of our explicit inflationism monetary policy. The MPC intends at a
minimum to inflate ! inflate ! inflate ! maintain the present highly stimulative
stance of monetary policy until every last saver is dead, economic
slack has been substantially reduced and house
prices are higher, provided this does not entail material risks to price
stability or financial stability house prices.
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