How Mervyn might explain the inflation rise

Inflation was up again in October, to 3.2% from 3.1%. As it remains above the 2% Government target, Bank of England Governor Mervyn King has to write to Chancellor George Osborne explaining why this is so.

One can only imagine the letter.

“Dear George,

Inflation was ever-so slightly up last month to 3.2%. But, hey, it’s a good job we don’t use the old RPI figure – that was at 4.5%!

Of course, this rise isn’t really my fault (I can’t remember when it last was actually). It’s those pesky fuel people who keep putting prices up. Oh, and you might want to look at your own figures – that nuisance fuel tax rise on 1 October didn’t particularly help, did it?

I’m not sure you’ll be too bothered about this, but food inflation for those poorer folk was actually down. You might want to use that as a headline?

I reckon this rise is only temporary anyway (did you see my quote on that one?), so let’s not be too down; it’ll look good next month if inflation is down for Christmas, eh?

Mind you, then you’ve got that VAT rise coming in January, haven’t you? Again – not me!

Look, the bottom line is this: we can’t see beyond the next couple of months, but we’ll just say that inflation is likely to be down to 2% by 2012. How’s that?

Hope the family are well. Regards to David.

Merv.”