Glen Oglaza writes…
“One thing puzzles me: The new Chinooks are due to come into service in 2012 and 2013 – but didn’t President Obama tell us only the other day that NATO will begin withdrawing from Afghanistan in 2011?”
If you haven’t got any gold, stock up on baked beans, because inflation is coming back. Data released this morning from the Office for National Statistics showed inflation in the UK rose for the second month in succession to 1.9% in November, jumping from 1.5% in October. This rise in inflation is far stronger than consensus economists were expecting. Guido will bet a large amount of money that the Governor of the Bank of England will have to write to Chancellor Osborne next year telling him why inflation is over-shooting target.
Not hard to figure out why when the government has printed the money to buy all the billions in government gilts offered this year. Take that in, the net effect of printing all that money via quantitative easing was to prop up the government’s debts. Andrew Lilico at Policy Exchange is equally as pessimistic as Guido, he is predicting 2 quarters of anemic growth, followed by 2 quarters of contraction next year and double digit inflation to follow by early 2012 – a double dip. Double digit inflation and probably a recession in 2013 – stagflation.
Lilico calls the failure of Darling to use the PBR to tackle the deficit sooner rather than later a “nihilist fiscal policy”. There has been some argument made by left-wingers that the ‘AAA’ rating is not really under threat and that it is just political scaremongering by George Osborne to claim otherwise. The fact is that the markets have already removed the triple ‘A’ rating before the ratings agencies. In terms of the interest rate paid and implied risk premium for UK debt, gilts trade like double ‘A’ countries – Japan, Portugal, Ireland – rather than triple ‘A’ countries like Germany. As a result, the cost of servicing UK debt is already 20% higher* than it is for Germany despite £200 billion having been thrown at keeping short-term rates down, not surprising when the UK leads the G20 in having the highest inflation and worst indebtedness.
*Market rates today for UK 10 year gilts 3.90% against 3.24% for German 10 year bunds.
John Bercow said…
“I once gave some lingerie to my wife that she regarded as naff, but I won’t describe it further. And I have not repeated the exercise.”
About now Tory-leaning bloggers will be enjoying lunch courtesy of CCHQ. They will be chatting with the tweeting Tory head of press and enjoying a drink with Andy Coulson.
Iain Dale, the doyen of Tory bloggers, will not be in attendance, but ConservativeHome’s Jonathan Isaby will be leading the pack of online party supporters gathered in the parliamentary dining room.
Guido’s working theory is that the next election won’t be decisively effected by blogs, though Draper’s dictum that during the campaign the news agenda and party narratives will be derailed by blogs, is probably true. It might be an embarrassing tweet, it might be a blogger uncovering something. The mainstream media gets pretty feral during a general election so it will be hard to grab media mind-share.
UPDATE : Coulson was a no show. It was braised boar (on the menu, not a reflection on Henry Macrory).
Just recently Brown praised Jenson Button’s barnstorming F1 championship victory, calling him a “brilliant ambassador for sport.” Not enough to see off a challenge from Ryan Giggs for Sports Personality of the Year though. Praised and damned by Gordon.
Switching over the channels over the weekend Gordon Brown revealed that he and his family were backing Stacey Solomon to win The X-Factor. Surprise surprise, Stacey Solomon, the Essex gal who has a budding career in any Mike Leigh film, was the first to go crash out of the weekend’s finals. Praised and damned by Gordon.
As regular readers will remember there was some speculation that Gordon had cursed David Beckham’s Football Academy. As many co-conspirators have pointed out, the news has come through that it is officially to shut. Visited and damned by Gordon.
Gordon is bunking off PMQs this week to go to Copenhagen. He was the first proper world leader to say he was coming. Surprise, surprise it’s not going too well. Developing nations walked out yesterday writing the whole thing off as a stitch up. Damned by association.