The Bank of England in Threadneedle Street, London. Deutsch: Sitz der Bank von England in der Londoner Threadneedle Street. (Photo credit: Wikipedia)

Fiscal policy (Photo credit: Wikipedia)

……………………………………………………………………………………………………………………..

The latest ONS report on consumer price inflation in the UK is INTERESTING READING. Check it out!

via Consumer Price Inflation, May 2013.

The most significant comment for me was:

The largest upward contributions to the change in the rate came from transport (notably air transport and motor fuels) and clothing.

It will be interesting to see whether the latest announcement will have any impact on the two important levers of economic policy, namely fiscal policy and monetary policy. I suspect that there will be little change to both. UK Chancellor, George Osborne is still locked in to his austerity policy, so no change in fiscal policy. Meanwhile, it is probably too early to expect any change in direction from the new leadership at the Bank of England as far as monetary policy is concerned.

Regular readers of this blog will know that I agree with the IMF‘s view that austerity in the UK has been too severe and the economy should be carefully reflated. In particular, I endorse the IMF’s recommendation to increase public borrowing by £10 billion this year and invest it in top-class infrastructure projects.

Any thoughts?

Related articles

• Dr Alf’s Two Cents: Only the Poor Die Young by Johan P. Mackenbach – Project Syndicate
• Dr Alf’s Two Cents: Inflation Nation Not – Paul Krugman – NYTimes.com
• Dr Alf’s Two Cents: Money in the Wrong Places: What Marx Got Right – David Blake – Montrose Associates
• Dr Alf’s Two Cents: Britain ought to be thankful for its political class – FT.com
• Dr Alf’s Two Cents: It is time for Lord Ashcroft and the Tory party to part company – Peter Obone – Telegraph
• Dr Alf’s Two Cents: Against Stupidity, The IMF Itself Contends In Vain – Paul Krugman – NYTimes.com
• Dr Alf Two Cents: Babies born in England and Wales had a father with an average age of 32.6 in 2011 – ONS
• Dr Alf’s Two Cents:Bruce Bartlett ‘Financialization’ as a Cause of Economic Malaise – NYT
• Dr Alf’s Top Six Blogs – Last Seven Days
• Dr Alf’s Two Cents: Is France Going to the Dogs?