eurealist.co.uk

Thanks to Dennis Cooper for these two funny letters.

This refers to an article by Bill Jamieson last week: “UK policy chasm: official numbers and the real world”: Link

“Few now believe that the CPI inflation measure bears much relation to the cost of living. Indeed, how could it when the CPI does not include housing or mortgage costs, taxes, national insurance, or council tax?”

Link

26 February 2006

Sir – I want to share a formula I have for beating the winter blues. It is one the provenance of which bears the hallmark of intellectual and financial integrity of the highest order. Put simply, I choose to believe the conclusions of those august members of the Monetary Policy Committee (MPC) who assert that the economy is picking up and everything in the garden is rosy. How comforting it is to know that irritating little outgoings such as mortgage payments, income tax, national insurance contributions and council tax do not form part of their thinking. I reason that if not part of theirs then why should they be part of mine?

I stopped worrying, went on a celebratory spending spree and got some terrific bargains at a number of High Street closing down sales. My bank manager, although at first seeming a little put out, not so much agreed as actually insisted that all my direct debits should be immediately stopped. It just goes to show what clever gentlemen those MPC members are.

Pauline Roberts, Cardiff -

Link

What inflation?

26 February 2006

Sir – With reference to your articles on the difference between the “cost of living” and the UK Consumer Price Index (CPI), I remember my times studying monetary economics at the London School of Economics in the mid 1980s.

One of my teachers used to say that if he was ever in control of monetary policy, the best policy would be to keep interest rates as low as possible whilst always denying the existence of any inflation. I wonder if his instincts have changed now that he is in control of monetary policy.

William Butler -