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  Howard - sorry mate but the dynamics of QE means that the worse is yet to come. We have just had the highest ever one month inflation figure and this is just the start of the rise. The normal response to this would be to increase interest rates but the economy cannot stand that because it is too weak. If the UK is downgrade then the cost of Government borrowing will rise, more QE, and we will be firmly on a spiral that could lead back to where Labour had us before in the mid-late 70's, 29% inflation in one year or even more. In other words a pensioner on a fixed income annuity of £3,000 per annum will see the purchasing power fall to £2000 in 12 months and by the time that was controlled their annuity could be utterly worthless.
  
  Bob is right, we could well be heading for a 'perfect storm' and the evil of stagflation.
  
  I was previously more optimistic about the effect of QE on inflation, thinking that much of the inflationary pressure would be mopped up by the weak economy countering the problem of deflation. I am more worried now because these figures are higher and faster than expected but also because of the attitude I encountered from David Blanchflower last week, (see my blog) and his dismissive attitude towards evidence contrary to his case for QE.

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