Today we have the inflation numbers for the year to end-of-June. They don't look pretty:
CPI.....: 3.8% (up from 3.3% last month)
RPI.....: 4.6% (up from 4.3% last month)
In case you'd forgotten, the CPI target is 2 percent, and its absolute upper bound is supposed to be 3 percent. It's roaring away. The Bank of England thinks it might hit 4% by the end of the year; I think if it's still under 6% we should count ourselves lucky.
It's only been a couple of days since the MPC met at the Bank of England and took a sanguine view that inflation was not a problem and interest rates could be left at 5%. This seems like a complete abdication of their responsibility. I don't think they really care anymore.
We have also had Alistair Darling all over the TV and radio asking for pay restraint to contain inflation. (So inflation is a problem after all, huh?) What he seems not to "get" is that the inflation in the UK is coming in from abroad; oil and food prices are rising due to increased consumption in the Far East. Pay restraint in the UK isn't going solve that; if anything it would make the pain worse. Only a base rate rise to stoke the value of sterling can fix this problem. Although cutting taxes would offset the damage to some extent.
Is the man stupid, or something?