Economics 101

I’m no economist, nor am I good with economical figures, but I get by thanks to a lot of common sense. While reading the Daily Telegraph even an amateur as me couldn’t help wondering if the British economy is heading the wrong way.

Figures published last Tuesday showed that the Consumer Price Index grew by 3 per cent during the year to December, an 11-year high. At the same time, the Retail Price Index jumped by 4.4 per cent, a rate of increase not seen since the country was in recession in the early 1990s.

This sharp rise in living costs wasn't entirely unexpected. After all, having seen a preview of the data the week before, the Bank of England imposed a "shock" interest rate rise, increasing borrowing costs from 5 to 5.25 per cent.

While expected, these eye-popping inflation numbers are significant none the less. After a year of ballooning domestic utility bills and burgeoning housing costs, price pressures are now really cranking up.
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Little wonder, then, that the CPI inflation index has now exceeded its 2 per cent target for eight months in a row.

Very obvious signs to me that something is rotten in the economy of Great Britain.