The big news is that on the day the house debates a no-confidence motion in Gordon Brown inflation news busts the pound through the psychological $2 barrier. Raising mortgage hike worries and putting exporters under extra pressure. Mervyn King, the Governor of the Bank of England, is obliged to write a letter explaining the situation and the proposed remedy. Guido suspects Gordon wrote to him first…Of course that still doesn’t explain why the other major European economies have lower inflation than the UK, after all, don’t they pay the same price for oil as we do?
Blaming the oil price is convenient – it means it has nothing to do with Gordon’s handling of the fiscal side of things. Gilt prices are falling, dragging long-term rates up because the City is increasingly wary of taking on even more government debt, despite Gordon’s off-balance-sheet manipulation of the PSBR. If he was a corporate CEO hiding debt off the books as he is, he would be looking at doing jail-time… Day 15 : At the Treasury, writing buck passing letters to the Governor of the Bank of England.