One day after the U.S. Federal Reserve announced a decision to spend an additional $600 billion on easing, The Bank of England has opted to leave rates where they are, and not to escalate its own quantitative easing policy.
The growth situation has been gradually improving in the U.K., posting a reasonably strong number of .8% this past quarter. But inflation is well ahead of the 3.1% annualized target. And there have been warnings from retailers that higher raw goods prices are beginning to creep into the price of finished products.
It's worth remarking that, overall, fears of inflation are higher among the British people than they are in the United States.
In the mid-1970s, The U.K. experienced a ruinously high inflation rate of nearly 25% per year — and that memory is deeply seared into the DNA memory of the British public. Even at its worst — during the miserable malaise era of Jimmy Carter — inflation the United States remained well under 15%. That's nearly 10% lower than what the British had endured just a few years earlier.
Perhaps we have lessons to learn from our stoical brethren on the other side of The Pond?