Inflation Balloons

Greg Bell regularly blogs on the state of the UK economy

A regular feature on the SBF Blog gives an outlook for interest rates, the current market conditions and who said what in the week that was. Why Balloons....why not, hot air, boom bust, simply insert your own punch lines.

Andrew Sentence poured cold water on the MPC’s belief that inflation will peak at 5% before dropping back to the governments target of 2% within two year and the big question is again just for how long can the MPC justify holding bank base rates at 0.5% without the allegation of playing politics with the real value of the pound in your pocket.

  1. Current rate of inflation 4.5%
  2. Next Change predicted +0.5% to 5% in October 2011
  3. Current Base rate 0.5%
  4. Next shift predicted September +0.25%