Stop worrying about inflation, part two

A graph and a table for anyone who doubts the MPC's overconfidence.

The fan chart below depicts the probability of various outcomes for CPI inflation in the future. This is the famous fan chart.

The MPC's forecast by quarter -- based on market rates and £200bn of quantitative easing -- is reported in the first column. The second reports the probability that inflation will be below 1 per cent.

MPC's inflation forecasts
Year and quarter MPC inflation forecast % Likelihood of inflation being less than 1 %
2010 Q4 3.27 <5
2011 Q1 3.61 <5
2011 Q2 3.47 <5
2011 Q3 3.29 <5
2011 Q4 3.03 6
2012 Q1 2.12 21
2012 Q2 1.97 25
2012 Q3 1.94 27
2012 Q4 1.85 30
2013 Q1 1.83 31
2013 Q2 1.85 31
2013 Q3 1.9 30
2013 Q4 1.96 28

 

From 2012 Q1, inflation is below the target. There is a significant chance that inflation will be below 1 per cent. But this is all based on a very optimistic growth forecast that may not pan out -- and if it doesn't, inflation will be even lower. There is every likelihood that the MPC's forecast for growth will be lower in their new inflation report to be published next week.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Labour to strip "abusive" registered supporters of their vote in the leadership contest

The party is asking members to report intimidating behaviour - but is vague about what this entails. 

Labour already considered blocking social media users who describe others as "scab" and "scum" from applying to vote. Now it is asking members to report abuse directly - and the punishment is equally harsh. 

Registered and affiliated supporters will lose their vote if found to be engaging in abusive behaviour, while full members could be suspended. 

Labour general secretary Iain McNicol said: “The Labour Party should be the home of lively debate, of new ideas and of campaigns to change society.

“However, for a fair debate to take place, people must be able to air their views in an atmosphere of respect. They shouldn’t be shouted down, they shouldn’t be intimidated and they shouldn’t be abused, either in meetings or online.

“Put plainly, there is simply too much of it taking place and it needs to stop."

Anyone who comes across abusive behaviour is being encouraged to email validation@labour.org.uk.

Since the bulk of Labour MPs decided to oppose Labour leader Jeremy Corbyn, supporters of both camps have traded insults on social media and at constituency Labour party gatherings, leading the party to suspend most meetings until after the election. 

In a more ominous sign of intimidation, a brick was thrown through the window of Corbyn challenger Angela Eagle's constituency office. 

McNicol said condemning such "appalling" behaviour was meaningless unless backed up by action: “I want to be clear, if you are a member and you engage in abusive behaviour towards other members it will be investigated and you could be suspended while that investigation is carried out. 

“If you are a registered supporter or affiliated supporter and you engage in abusive behaviour you will not get a vote in this leadership election."

What does abusive behaviour actually mean?

The question many irate social media users will be asking is, what do you mean by abusive? 

A leaked report from Labour's National Executive Committee condemned the word "traitor" as well as "scum" and "scab". A Labour spokeswoman directed The Staggers to the Labour website's leadership election page, but this merely stated that "any racist, abusive or foul language or behaviour at meetings, on social media or in any other context" will be dealt with. 

But with emotions running high, and trust already so low between rival supporters, such vague language is going to provide little confidence in the election process.