Reaction to inflation rise

Responding to the news of a sharp rise in inflation, Centre for Policy Studies author George Trefgarne commented

"Most people do not need official statistics to tell them prices have been rising dramatically for several months. They can see for themselves every time they fill up their car, or go to the supermarket. House prices are also shooting up again. Furthermore, hardly anybody is getting a pay rise these days, so inflation means disposable incomes are actually falling.

 The fact is that the economy is recovering faster than expected. But this is not a solid recovery, based on improved productivity. It is a snake-oil recovery, created by Labour agreeing with the Bank of England to print £200 billion and to inject it into the economy.

 We should not be deceived. The fact is that the British economy has been badly mismanaged in recent years and printing money is only a temporary solution. What this country needs is strong Government action to reduce the national debt, cut taxes and control spending. What Britain does not need is a political fix which sets off another cycle of boom and bust and which leads, inevitably, to a rise in interest rates after the election."

Source: ©Centre for Policy Studies

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