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Tuesday, August 18, 2009

expecting the unexpected

This is how the BBC announced the most recent UK inflation data:

A key measure of inflation in the UK has unexpectedly remained at 1.8%. Economists had expected the Consumer Prices Index (CPI) to decline to 1.5% in July

It is hard to see how the stickiness in inflation should be unexpected. It is a stated aim of the Bank of England to increase the inflation rate. To achieve this despicable objective, it has created an unprecedented increase in the monetary base. There is no secret here, and its consequences on the price level is entirely predictable.

Perhaps the journalist is guilty of a typo.

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