Boe Misses Inflation Target - Deflation Looms?

[Gromit]

// ..the government has set a target for the Bank of England of setting monetary conditions - through changes to the interest rate for lending to banks and via quantitative easing - to keep inflation at 2%, with a one percentage point margin of error on either side of 2%.

So with CPI inflation today announced at 0.5% for December - the joint lowest since records began in 1989 - the Bank of England has failed. //

A bad sign for the state of the economy. Can Osborne turn this around?

[factor-fiction]

I think we may see some more quantitative easing across Europe shortly.

[Gromit]

http://www.telegraph.co.uk/finance/economics/11340538/Deflation-is-coming-to-the-UK-and-it-will-have-a-huge-impact-on-business.html

[Old_Geezer]

It's fine by me.

I see that the BBC has an article which comes up with loads of daft excuses why it is so bad [lifts eyes to the heavens]

Anyway maybe they can un-quantitative ease now.

[ludwig]

He's no economist, but he's got a decent voice.

[jim360]

It's not that daft, surely? If the money in your pocket will be worth more tomorrow, why spend it? Deflation can affect cash flow, which ain't not good, OG.

[ToraToraTora]

deflation leads to stagflation and/or deflationary spiral, worse than mild inflation.

[jno]

Anthony Hilton - an extremely good City journalist - says he doesn't think deflation is all that awful

http://www.standard.co.uk/business/markets/anthony-hilton-theres-really-nothing-to-fear-from-deflation-9975440.html

His last sentences need reading, though.

[DaisyNonna]

Have you forgotten how to speak English?

[jno]

who are you talking too, Daisy? And what about?

[Old_Geezer]

Then don't spend it Jim. Eventually die richer and leave it all when you could have enjoyed life. Anyway we don't all spend everything today when he have inflation, so why would low inflation or even low deflation make a lot of odds ?