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    Just announced:
    CPI inflation at 5.2 per cent in September, a three-year high.
    RPI inflation 5.6 per cent, the highest for twenty years.

    I have been saying that inflation was set to get worse for a while now, ever since QE1.

    The Bank of England needs to get a grip but having another round of QE this is set to get even worse in 18 months/2years time. Clear down mortgages and debt while the going is good. QE will push down investment interest rates more while the pressures for lending rates to rise will increase as a means to battle inflation. Only the very weak economy, being made all the weaker by the European malaise, is preventing rates from rising now but this will not last forever and as soon a life appears in the economy lending interest rates will start to go up. The gaps between low investment rates and (higher) borrowing rates will increase.

    Better add, that there will be some easing in price rises next year (VAT increase dropping out and overall economic weakness) but that will be temporary. The big problem is the devaluing of the currency (what 'inflation' really is) by increased money supply (QE) and the £75bn QE is not likely to be all there is.

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