BBC’s Bob Pesto tells us that inflation is likely to dip under 1% and Mark Carney will have to “write a letter explaining why inflation is too low – and what he and his colleagues intend to do about it.”
Sadly, Osbourne ought to be kowtowing to Carrney not the reverse. Carney doesn’t exactly have the authority or a large enough personal fortune to be able instigate a fiscal stimulus.
The Bank of England’s weakly conditional QE was partly to blame. The alleged fall in unemployment has failed to raise tax receipts or inflation. (Weak demand? – Ooh! – Keynesian – cheeky!)
I suspect that the employment that has been created is pretty flimsy. And the QE input either hasn’t trickled down, or it’s covered up what would have been significant deflation.
With pan-European stagnation starting to cast a shadow, things are starting to look stinky.