1. Matthew Barrett unveils the Westminster Brat Pack.2. Ben Brogan reckons Nick Clegg is boosted by Huhne's implosion.
3. Guido proves that Huhne's wife couldn't have been speeding.
4. Mark Wallace discovers further signs of a Conservative/Lib Dem merger.
5. Paul Waugh wonders who could replace Huhne.
6. Adrian Masters looks at the Welsh Conservative leadership race.
7. Mark Gettleson analyses Ed's flashman joke with the voters.
8. Neil Midgley reports another example of BBC waste.
9. Michael O'Brien reveals that Donald Trump won't be standing for President.
10. Dan Hodges doesn't think the Military Covenant should be enshrined.
11. Daniel Korski thinks Briton could run the IMF.
12. Brian Micklethwait has a collection of Rally Against Debt signs.
1 comment:
For me the most interesting graph (below) of this week was from the BBC. What it shows is inflation rising at a constant rate since 2002 - with a dip during the 2009 credit crunch. This is not just inflation this is constant increasing inflation.
http://www.bbc.co.uk/news/business-13421614
The Government needs to review the roles of the BofE MPC. In the inflation graph from the ONS (below) it only shows inflation since the crunch - the narrative they use is that inflation is a blip - but it is clear from the larger graph (above) it is a much much longer term trend - that has spanned 10 years.
http://www.statistics.gov.uk/cci/nugget.asp?id=19
This trend is caused by growth in the developing world. This will not go away and will only increase. Both India and China have only just started growing, with greater populations in each country than the US and EU combined - they will dwarf demand from the west. With only 10% of people paying tax in India they still have huge growth potential.
Second the MPC are targeting wage inflation, not cost inflation. They cannot control cost inflation from the developing world, which is where most of our cost inflation comes from. This graph (below) from moneyweek shows how interest rates are correlated with average earnings and not cost inflation. Either through a complex round about way, unconsciously or through deceit the MPC has targeted wage inflation and will push interest rates up when private sector wages wages go up.
http://www.moneyweek.com/news-and-charts/economic-indicators/inflation/05-wage-rises-inflation-indicator-00005
If I were in Camerons' and Osbornes' shoes I would start by taking a long hard look at the MPC and say that they are aiming at the wrong inflation target for the wrong reasons. What is needed, and frankly all that is practically possible, is that private sector wage inflation ONLY needs to be targetted using interest rates by the MPC. Trying to do anything else is delusional. However, as we've seen, because cost inflation can't be controlled by interest rates, the Government needs to decouple cost inflation from public sector wage inflation so that public sector wages don't spiral out of control with cost inflation. So this leaves the MPC targetting private sector wage inflation and the Government targetting public sector wage inflation, using what ever index they choose. So the MPC needs to change - or their repuation will be trashed (as inflation keeps rising - as it will) and public sector pay will sprial out of control (as it will if it is not decoupled). I have no doubt that what I'm saying is spot on.
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