Deflation news

[BrilloPad]

Problem is that Govt is working 24/7 to keep increasing debt - when grow your debt at 10%+ per year then even 5% inflation not enough.

It is more the situation that the government inherited. Its the interest payments that are giving us grief. Oh, and increasing the spending so much did not help now. Well done Gordon for redefining the economic cycle.

[AtW]

The idea seems to be to deflate away the UK debt - default by stealth.

Problem is that Govt is working 24/7 to keep increasing debt - when grow your debt at 10%+ per year then even 5% inflation not enough.

[AtW]

"undershooting the [inflation] target "

Notice how they avoid now using word deflation to justify money printing

[BrilloPad]

WTF - they think there is risk to undershoot inflation target and therefore they'll print more money?!?! Who are those "members" who think there is real risk of getting inflation below target of 2%?!?!

2% now seems to be a minimum rather than a target. I find it astonishing that the whole commitee is not sacked - along with the government for not sacking them.

They could at least fess up and admit that it is growth which is being targeted. And that 2% is a minimum because of the possibility of deflation. But this would cause wage rises which they want to avoid.

The idea seems to be to deflate away the UK debt - default by stealth.

At some point the QE is going to leak out, wages will start rising and inflation will go through the roof. But not for a few years yet. At that point it is time to buy property.

[TimberWolf]

Hang on - weren't these the same folks that said that QE wasn't causing inflation in the first place.

Nah, it's only the cretins on this site that say that. The BoE have been consistent in their honesty about its inflationary effect:

In March 2009, the Monetary Policy Committee announced that, in addition to setting Bank Rate at 0.5%, it would start to inject money directly into the economy in order to meet the inflation target. The instrument of monetary policy shifted towards the quantity of money provided rather than its price (Bank Rate). But the objective of policy is unchanged - to meet the inflation target of 2 per cent on the CPI measure of consumer prices. Influencing the quantity of money directly is essentially a different means of reaching the same end.
Bank of England | Monetary Policy | Quantitative Easing Explained

[TimberWolf]

Once you start printing, it's hard to give up. Every generation seems to think that they have found a special way of printing that will work out fine though.

[centurian]

Minutes from the Bank's rate setting meeting said: "For some members, the risks of undershooting the [inflation] target meant that a further expansion of asset purchases was likely to be required."

Hang on - weren't these the same folks that said that QE wasn't causing inflation in the first place.

[AtW]

Just read this:

"Mr Osborne refused to budge on austerity, though, blaming the eurozone.

"These are disappointing figures but they are not entirely unexpected," he said. "We have got the right plan, we have got to stick to it but we have got to accept that Britain's problems have been made worse by the situation in the eurozone."

While the Treasury intends to stick to its guns, the Bank indicated it is planning more quantitative easing (QE) next month. Minutes from the Bank's rate setting meeting said: "For some members, the risks of undershooting the [inflation] target meant that a further expansion of asset purchases was likely to be required."

The Bank has already injected £275bn into the economy through QE. Economists expect another £50bn to £75bn in a fortnight's time.

According to the ONS, manufacturers bore the brunt of the quarterly slump, declining 0.9pc – the steepest fall since the start of the recession in 2008. "

Source: UK heading for first double-dip recession since 1975 - Telegraph

WTF - they think there is risk to undershoot inflation target and therefore they'll print more money?!?! Who are those "members" who think there is real risk of getting inflation below target of 2%?!?!