The Bank of England is desperate to start cutting interest rates so as to mitigate the gathering economic slowdown, though whether it would do any good in a world where the problem is the availability of money, rather than its price, is an interesting question.
In any case, the latest British Retail Consortium/Nielsen Shop Price Index, showing food prices rocketing by 9.5 per cent, hardly helps its cause as the MPC considers today's interest rate decision. Central bankers like to point to "core inflation", which exludes prices outside their control such as food and energy, in trying to convince us that actually things aren't that bad. This has always struck me as a misnomer, as most people would think of "core" as referring to essential spending, the very stuff the measure excludes. About the only things not rising in price right now are houses. It must be time to include them back in inflation targeting.Reuse content