UK Inflation Spikes to 4 Percent—Double the Targeted Rate


Spiking inflation in the UK has just hit 4 percent —double the Bank of England's inflation target.

Coming on the heels of China's 5 percent inflation report, it isn't hard to see something of a trend.

So now we begin the guessing game: To what extent are the causal factors of inflation in the UK and China the consequence of specific national policies—and to what extent are they the result of broader global demand issues?

Specifically: How much of China's inflation can be attributed to their "massive stimulus package"?

To what extent can British inflation be blamed on, for example, higher value added taxes—as today's Financial Times suggests?

What's more disturbing: The 4.0 percent inflation rate in England came in above forecasts, ahead of a 3.7 percent rate prediction by economists.

But the most disconcerting fact of all may be that a 4.0 percent inflation rate in Britain represents a rate that is twice the official Bank of England inflation target.

The US Federal Reserve, of course, doesn't have an explicit inflation target.

And now you see one of the reasons why: No central banker wants to read the headline 'Inflation at Double Targeted Rate.'


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