Tuesday, December 14, 2010

U.K. 3 Year Inflation Average Above 3%

The Bank of England is supposed to keep consumer price inflation at 2% per year, with failure being defined if it deviates more than a percentage points from it. It is now clear that it is failing in a systematic way as consumer price inflation rose to 3.3% in November.

Considering that consumer price inflation was 1.9% in November 2009 and 4.1% in November 2008, the 3 year average inflation rate was 3.1%. According to its own standards, the Bank of England's monetary policy has thus been a great failure.