“The Bank of England should end its asset purchases now”: IEA expert comments on ONS inflation figures
Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, responded to consumer price inflation figures published by the Office for National Statistics, which show inflation has jumped to 2.1 per cent
“The jump in inflation in May is another warning of the dangers of pumping even more money into an economy that is already growing strongly. The Bank of England should end its asset purchases now, while the Chancellor must continue to resist calls for more government spending and borrowing.
“The year-on-year increase of 2.1 per cent in the CPI was larger than most had expected, including the Bank of England, and sets inflation on course for at least 3 per cent later in the year. A small and temporary overshoot of the official target of 2 per cent would be acceptable, and perhaps even desirable. However, inflation has a habit of sticking around and hits the poorest in society the hardest.
“Some of the price pressures are transitory, but even these are stronger than anticipated — and they are not being offset by lower inflation elsewhere. This is a classic example of too much money chasing too few goods, and services.”
Notes to Editors
For media enquiries please contact Annabel Denham, Director of Communications, 07540 770 774
IEA spokespeople are available for interview and further comment.
Further IEA reading:
- Inflation: The next threat? by Dr Juan Castaneda and Professor Tim Congdon
- Modern Monetary Theory: Why it can’t provide sustained economic growth and low inflation by Dr Juan Castaneda
Latest News from
Pay is important, but it is not the only factor contributing to high staff turnover: The King's Fund response to the NHS staff 3 per cent pay rise22/07/2021 14:35:00
Richard Murray, Chief Executive of The King’s Fund, commented on the government’s decision this evening to offer NHS staff a 3 per cent pay rise, as recommended by the independent Pay Review Body
IFG - UK government's Shared Prosperity Fund risks damaging trust in union22/07/2021 14:20:00
A new Institute for Government paper warns that the UK government’s post-Brexit UK Shared Prosperity Fund (UKSPF) – replacing EU ‘structural funds’, to be launched in April 2022 – risks damaging trust between the UK and devolved administrations and undermining the UK government’s key objective of binding the four nations of the UK closer together.
IEA expert responds to ONS government borrowing figures21/07/2021 14:20:00
Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, commented on the government borrowing figures for June published by the Office for National Statistics
IFS - No relief for Rishi Sunak as he prepares for Spending Review: lower-than-expected borrowing likely to prove only temporary21/07/2021 13:05:00
Despite improving public finances this year, the Chancellor is likely to have very little room for manoeuvre in his forthcoming Spending Review. That is because while the economy is recovering more quickly than expected at the March Budget, this may not translate into a permanent improvement in the economic outlook.
Adam Smith Inst - National insurance hike: a crushing betrayal and attack on younger and poorer20/07/2021 15:20:00
ASI’s Head of Government Affairs John Macdonald, responded to reports suggesting the Government will increase national insurance to fund a social care expansion
National Insurance hike “yet another burden on working age people”, says IEA expert20/07/2021 14:20:00
Professor Len Shackleton, Editorial and Research Fellow at free market think tank the Institute of Economic Affairs, commented on the planned increase in National Insurance
Civitas: Former Social Security Secretary’s plans to let elderly insure against the need to sell homes to pay for Social Care to be debated in parliament14/07/2021 16:25:00
Given the new Health and Social Care Secretary’s commitment to set out “the general sense of direction” of his plans to reform social care “quite soon”, a former Social Security Secretary (1992-1997), Lord (Peter) Lilley has introduced a Bill to enable homeowners to insure against having to sell their homes to pay for social care, at little or no extra cost to the taxpayer.
JRF: Planned cuts to Universal Credit will hit incomes of millions of households unable to afford a minimum living standard14/07/2021 14:38:00
The Joseph Rowntree Foundation and the Centre for Research in Scoial Policy at Loughborough University publish the annual A Minimum Income Standard for the UK in 2021 report.