Inflation

Those of us who lived through the years of high inflation in the '70s and '80s know how badly inflation affects the lives of us all. It is like a huge tax hike and to get rid of it involved a lot of pain. Whichever index you look at (Brown's CPI, preferred because it leaves so many essentials out of its calculation, or the more honest RPI) inflation is now rearing its ugly head again and despite Mervyn King's reluctance to do so the Bank of England must start doing something about it. Not to do so will be an act of criminal neglect and should result in the Chancellor dismissing both King and the other members of the Committee charged with keeping inflation under control - or at least those members who month after month vote to keep the interest rate at 0.5%. My view of Mervyn King was somewhat neutral but is now highly suspicious since I do not remember who pointed out the other day that he was one of the 300 odd economists who wrote to The Times to denounce Thatcher's method for dealing with inflation. All those economists ended up with egg on their faces as the Iron Lady's prescription won the day. I wonder what position the Labour party will take on this issue. They are now going back into their comfort zone as a party of opposition. Almost without taking a breath they are now railing against some policies that in office they had claimed as their own, e.g. education and the national health. So much easier for lefties to oppose. In contrast the Tories are not so good in opposition and generally speaking much better in government. Long may that continue!