How long do you expect high inflation to last ?

[vand]

It suits the govt to erode national debt and given the size of all debt, national and personal, I can't see them ever ramping up interest rates to the degree necessary to lever inflation back down again any time soon,

Unlike the 1970s there's debt issued on indexed terms. That must surely bite into government finances eventually.

The danger is that price increases snowball. If a mobile phone contract increases in price by 8%, users may look to increase their prices or wages by more than that, which feeds into the next measurement. In the 1970s wahe and price controls were the mechanisms used to attempt to break the cycle, Later it was threats of bankruptcy and unemployment,

Yes... and today we have progressed on from controlling the price of labour and goods and services to controlling the price of money, which is far, far more dangerous.

[GrahamPlatt]

https://www.theguardian.com/business/2022/apr/05/world-may-be-on-cusp-of-new-inflationary-era-says-central-bank-chief

I’m with Carstens rather than Cunliffe here. While accepting that the de-unionisation of the UK might ease wage inflation pressures here, we are still at the mercy of the wage inflation in countries where this is not the case, from whom we import.

[CliffEdge]

https://www.theguardian.com/business/2022/apr/05/world-may-be-on-cusp-of-new-inflationary-era-says-central-bank-chief

I’m with Carstens rather than Cunliffe here. While accepting that the de-unionisation of the UK might ease wage inflation pressures here, we are still at the mercy of the wage inflation in countries where this is not the case, from whom we import.

Yes

[dealtn]

Literally no idea.

Inflation is notoriously difficult - almost impossible - to model. None of the models used by central bankers, for example, forecast inflation above 4% in 2021, never mind ending the year around 7%.

Really? The fan chart published by the Bank of England in its Quarterly Inflation Report has had CPI potentially above 6%, let alone 4%, for quite some time. (It's not hit 7% yet).

See Feb 21 for instance.

https://www.bankofengland.co.uk/-/media ... 901709AA44

[NotSure]

Literally no idea.

Inflation is notoriously difficult - almost impossible - to model. None of the models used by central bankers, for example, forecast inflation above 4% in 2021, never mind ending the year around 7%.

Really? The fan chart published by the Bank of England in its Quarterly Inflation Report has had CPI potentially above 6%, let alone 4%, for quite some time. (It's not hit 7% yet).

See Feb 21 for instance.

https://www.bankofengland.co.uk/-/media ... 901709AA44

I think you are being quite generous! The fan chart on p7 and the projections on p11 were centred at 2.25% with the 5th and 95th percentiles at just under -1% and just over 5%. We have 6.2%, so I think it's fair to say they didn't see that coming? Well, they were 95% confident it would be at least 1% less than it is.

[dealtn]

Literally no idea.

Inflation is notoriously difficult - almost impossible - to model. None of the models used by central bankers, for example, forecast inflation above 4% in 2021, never mind ending the year around 7%.

Really? The fan chart published by the Bank of England in its Quarterly Inflation Report has had CPI potentially above 6%, let alone 4%, for quite some time. (It's not hit 7% yet).

See Feb 21 for instance.

https://www.bankofengland.co.uk/-/media ... 901709AA44

I think you are being quite generous! The fan chart on p7 and the projections on p11 were centred at 2.25% with the 5th and 95th percentiles at just under -1% and just over 5%. We have 6.2%, so I think it's fair to say they didn't see that coming? Well, they were 95% confident it would be at least 1% less than it is.

Not disputing that. I didn't however make a claim no central bank was forecasting above 4% though. Someone else did. 4% was well within the range of forecast possible rates for the entirety of the time horizons spanning 2022 to 2024. The fan chart shows the chance of being at 4% was about a 1 in 6 probability. I suspect similar investigations of numerous other central banks would also have provided such possibilities.

[vand]

Literally no idea.

Inflation is notoriously difficult - almost impossible - to model. None of the models used by central bankers, for example, forecast inflation above 4% in 2021, never mind ending the year around 7%.

Really? The fan chart published by the Bank of England in its Quarterly Inflation Report has had CPI potentially above 6%, let alone 4%, for quite some time. (It's not hit 7% yet).

See Feb 21 for instance.

https://www.bankofengland.co.uk/-/media ... 901709AA44

chart 1.4 shows a possible upper boundary of about...*squints*... 5.6-5.7% this year and persisting through most of 2022-24.

Given where we currently are today and now the BoE itself is saying inflation won't peak until Q3 we're about to literally go off the (old) chart.

[dealtn]

Literally no idea.

Inflation is notoriously difficult - almost impossible - to model. None of the models used by central bankers, for example, forecast inflation above 4% in 2021, never mind ending the year around 7%.

Really? The fan chart published by the Bank of England in its Quarterly Inflation Report has had CPI potentially above 6%, let alone 4%, for quite some time. (It's not hit 7% yet).

See Feb 21 for instance.

https://www.bankofengland.co.uk/-/media ... 901709AA44

chart 1.4 shows a possible upper boundary of about...*squints*... 5.6-5.7% this year and persisting through most of 2022-24.

Given where we currently are today and now the BoE itself is saying inflation won't peak until Q3 we're about to literally go off the (old) chart.

Which is as maybe, and wouldn't have got a reply should you have published that chart earlier as part of your critique.

However you made the claim that none of the models used by central bankers forecast inflation above 4% ...

This was simply wrong and was pointed out to you.

[vand]

Literally no idea.

Inflation is notoriously difficult - almost impossible - to model. None of the models used by central bankers, for example, forecast inflation above 4% in 2021, never mind ending the year around 7%.

Really? The fan chart published by the Bank of England in its Quarterly Inflation Report has had CPI potentially above 6%, let alone 4%, for quite some time. (It's not hit 7% yet).

See Feb 21 for instance.

https://www.bankofengland.co.uk/-/media ... 901709AA44

chart 1.4 shows a possible upper boundary of about...*squints*... 5.6-5.7% this year and persisting through most of 2022-24.

Given where we currently are today and now the BoE itself is saying inflation won't peak until Q3 we're about to literally go off the (old) chart.

Which is as maybe, and wouldn't have got a reply should you have published that chart earlier as part of your critique.

However you made the claim that none of the models used by central bankers forecast inflation above 4% ...

This was simply wrong and was pointed out to you.

You do like you get hung up on your symantics.

I can point you towards official publications like this from barely a year earlier where the core PCE projection now just look plain stupid.
https://www.federalreserve.gov/monetary ... 210317.pdf

There is a difference between forecasting inflation at 4% or even 7% and saying that it might go there. It "might" go to 20% or 30%.. but no one is actually forecasting that.

[dealtn]

You do like you get hung up on your symantics.

Mmm. Maybe best to let that one go.

I'm not hung up. It's a core part of language and logical reasoning. It can't be helped that my brain is wired to the literal of what is written, said and argued. It is hard to comprehend this is wrong. If you mean something different, or have alternative points, or wish others to abstract an alternative understanding, perhaps the fault lies with the message or the messenger, not the recipient.

[GeoffF100]

Here is what the market is betting on:

https://www.bankofengland.co.uk/statistics/yield-curves