U.K. Printing Press

Bank of England released its Inflation report. Report suggests that “inflation may exceed 2% target in 2012”. Bloomberg story: Bank of England Lifts Forecasts for Inflation, Growth.  Is it just me, or it sounds, let’s say,  impossible for a country running budget deficits around 12% of the GDP in this and next year; with central bank owning around 20% of gilts issued and counting; public debt raising above 100% of GDP sometime in 2012; rating agencies warning of possible AAA rating removal, and GDP growth projected reaching maximum 2% in couple of years; to escape the recession without massive  inflation.

Chart 1. CurrencyShares British Pound Sterling Trust

Source: StockCharts.com

Source: StockCharts.com

CurrencyShares British Pound Sterling Trust representing here GBP/USD exchange rate. GBP strengthening in comparison to USD. Despite all the U.S. issues it makes no sense that this continues.

This entry was posted on Wednesday, November 11th, 2009 at 3:48 pm and is filed under Markets. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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